Two FTI Consulting executives to help Weatherly International with restructuring

06 June 2018

Following an approximately month-long strategic review of its sale and asset disposal options, copper mining firm Weatherly international, which operates primarily in Namibia, has entered into insolvency proceedings. The firm has appointed Simon Kirkhope and Andrew Johnson – two senior executives from FTI Consulting – to administer the proceedings. 

The global dip in commodity prices, particularly those of precious metals, dealt a significant blow to the mining industry in Africa and across the world. Most businesses saw their revenues dip, and have had to engage in diversification efforts to remain relevant, primarily with respect to leveraging technological applications in the sector to reduce costs and increase efficiency.

However, not all firms have been able to ride this wave successfully. Founded in 2000, Weatherly International (WTI) is a UK-based copper mining firm that has an extensive African practice, operating out of a subsidiary in Namibia. The firm specialises in operating medium-scale mines, choosing to remain outside of the competition among large mining corporations.

Following a period of cyclical lows in commodity prices, WTI was forced to seek financial advice from two consulting firms – Numis Securities and Treadstone Resources Partners – in April this year, primarily regarding the firm’s financial future in light of high debt-levels and dismally low revenues.

Simon Kirkhope and Andrew Johnson - Weatherly International

The firms reviewed several options for WTI, including the sale of the entire share capital, restructuring of its debt, disposal of assets or issuance of equities. As a result, WIT decalred that it had entered an offer period, wherein suitors were welcomed to discuss the sale of the firm and arrive at terms.

Now, a month after entering its offer period, the firm’s financial situation has become uncertain to the point that its ordinary shares have been suspended from trade on the Alternative Investment Market – the sub-division of the London Stock Exchange on which WIT is listed. The firm has now entered insolvency proceedings, the administration of which will be conducted by Simon Kirkhope and Andrew Johnson of FTI Consulting.

A statement on WTI’s website reads, “The Administration appointment relates solely to WTI with all other entities within the Group remaining outside of an insolvency process and continuing to trade under control of their directors. The Joint Administrators will work closely with the management of the subsidiary entities to establish the optimal strategy for the Group with a view of maximising recoveries to creditors of WTI.”

Kirkstone and Johnson are both Senior Managing Directors of FTI’s Corporate Finance & Restructuring segment, each with approximately 15 years of experience in the field. Kirkstone’s expertise lies in restructuring and insolvency of both a consensual and forced nature, while Johnson has additional expertise in financial advisory and contingency planning.

Deacons East Africa considers two PKF executives as administrators

22 November 2018

Following an extended period of financial difficulties, Kenya-based apparel retail chain Deacons East Africa has announced its openness to the possibility of appointing administrators to help rescue the firm. Two executives from global advisory firm PKF Kenya are currently under consideration.

Deacons East Africa has been struggling to keep its business afloat, having reported consistent losses over the last two years. In the six months leading up to June 30th 2017, the firm’s losses stood at just over Sh 180 million, a figure that has jumped to nearly Sh 230 million for the same period this year.

Despite operating in the most lucrative region in Africa, most of these losses can be attributed to the shutting down of South African clothing retailer Mr. Price. The substantial dip in overall sales resulting from the closure reportedly cost Deacon East Africa nearly 21% of their annual revenues.

In order to help rescue its operations, Deacons East Africa is now considering the appointment of administrators. As elucidated by CEO of Deacons East Africa Muchiri Wahome, “The primary objective of placing the company under administration is to enable it achieve a better outcome for the creditors than would likely to be the case if the company were to be liquidated.”

Deacons East Africa considers two PKF executives as administrators

Currently, the firm is considering two executives to oversee the administration process, namely Peter Kahi and Atul Shah of PKF International. PKF is a global network of consulting firms that offer services in the domains of assurance & advisory, taxation, corporate finance and – most pertinently – insolvency.

Kahi, who is a Partner at PKF Kenya, has an academic background in Commerce, and is a Certified Public Accountant of Kenya. He also holds a number of other qualifications, including the title of Certified Fraud Examiner, Associate at the National Board of Accountants and Auditors in Tanzania, and a Licensed Insolvency Practitioner in Kenya.

Shah, meanwhile, is the CEO at PKF Eastern Africa, in addition to being the Director of PKF Consulting and a Partner at PKF Kenya. He is also the Chairman of PKF’s Africa Borad, a Member of the PKF International Global Council and the Director of the PKF International Africa Board.

An MBA by academic background, Shah is also a Fellow of the Chartered Institute of Certified Accountants (CICA) in the UK as well as a member of the CICAs in Kenya, Uganda and Rwanda. If appointed, he and Kahi will work as joint administrators for Deacons East Africa.