The court has given troubled Twiga Foods some breathing space in its ongoing battle with tech company Incentro Africa Limited. On 25th September, Twiga Foods moved to court seeking to block a push by Incentro Africa to have the agri-food tech company liquidated.
Following its petition, Twiga Foods was granted a temporary injunction stopping the Incentro from proceeding with its liquidation move.
Incentro Africa is a Google Clouds service provider. It had moved to court alleging it was owed close to KES 39 Million. However, Twiga Foods disputed the claims and argued that Incentro was forcing them to pay a disputed debt.
“That Incentro Africa is acting unreasonably in pursuing liquidation of the company instead of pursuing other remedies as set out in the agreement between the parties,” the firm said in the petition.
In the past, Twiga Foods has paid Incentro Africa KES 95 million and the firm claims it only has a debt of KES 13.2 million.
Liquidation Could Damage Reputation
The Kenyan startup argues the liquidation push will destabilize its day-to-day operations. Further, the claims will damage the reputation of the firm creating a bad impression among staff, business relations, credit facilities, regulators and government authorities.
Indeed, any liquidation proceedings will force Twiga Foods to default on its other loan obligations.
Despite raising KES 25 billion, Twiga Foods has been under financial strain. The firm has cut down on its workforce and restructured its operations. There have been numerous reports some suppliers have abandoned the business-to-business company due to lack of payment.
The case brought against the firm is bound to make the matter worse.
“For its suppliers, the threatened liquidation proceedings would extinguish the credit terms the company has, putting the company in a negative working capital position,” said Daniel Ngugi, Twiga Foods Head of Legal.
Justice Josephine Mong’are will listen to the case in court today.
