Njuca Consolidated, Three Firms Faces Auction of 65 Properties Over Crippled Cash Flow

The High Court has cleared Equity Bank to auction at least sixty-five properties across Nairobi and Mombasa after the four companies that borrowed Sh1.37 billion in 2021 failed to halt enforcement. Njuca Consolidated Company Limited, Wakuga Holdings Limited, Cochem Services Limited and Paric Hardware Products Limited lost their bid to stop the sale, with the court ruling that disputes over interest calculations, property valuations and unpaid government certificates do not automatically block a lender’s statutory power of sale once proper notices have been served.

The companies had already paid more than Sh204.9 million yet still faced arrears of Sh101 million and a claimed balance approaching Sh2 billion.

Director Ann Muthoni Njoroge filed an affidavit stating the firms remained willing to restructure and continue the relationship with the bank, but the court noted they had previously secured conditional protection in related matters without meeting a required Sh30 million deposit into the loan account.

The distress traces directly to the nature of the public contracts Njuca and its associates were executing. One active strand involved the Changamwe Repooling Sewer Network under Contract No. AWSB/AFDB/KTSWSSP/W/09/2018, part of the Kenya Towns Sustainable Water Supply and Sanitation Programme.

Njuca was on site constructing and rehabilitating sewer lines, treatment components and distribution infrastructure when disputes over site access, possible replacement of the contractor and funding lapse risks escalated into arbitration with Athi Water Works Development Agency.

Equity Bank appeared as an interested party in those proceedings, linking the securities now facing auction to financing tied to this coastal water and sanitation work. The presence of Mombasa-area parcels among the sixty-five properties under threat aligns with this project’s location and timeline.

Parallel road infrastructure engagements added further pressure. Njuca held performance-based or maintenance contracts with the Kenya National Highways Authority.

In the first quarter of financial year 2023-2024, KeNHA records show the formal appointment of an adjudicator in the matter Njuca Consolidated Company versus KeNHA, a step that typically follows unresolved disputes over payments, certifications, scope changes or performance penalties on highway works.

These contracts characteristically require heavy upfront mobilisation and materials outlays while reimbursement arrives in stages, creating exactly the liquidity gaps the borrowers blamed on government agencies.

The companies had also positioned themselves for larger residential work. Njuca appeared on official lists of strategic partners and prequalified developers for the national Affordable Housing Programme, opening the door to participation in the push for tens of thousands of units. No specific site awards are detailed in public records, yet the prequalification confirmed active pursuit of high-volume government housing contracts during the same window the Equity facility moved into default.

The pattern is consistent across the portfolio: major public infrastructure commitments that generate substantial turnover on paper but deliver erratic cash inflows once disputes, certification delays and funding constraints intervene.

The Sh1.37 billion facility appears to have been used to bridge precisely those gaps, with group properties pledged as security. When the bank moved to realise those assets, the borrowers turned to the courts arguing inflated interest, undervalued collateral and sovereign payment failures. The High Court rejected those arguments, holding that competing valuations without proof of fraud or collusion do not justify injunctive relief and that statutory notices had been properly served.

The ruling leaves the properties exposed to public auction at values the borrowers claim are far below their true worth. Any shortfall will remain recoverable from the companies and their guarantors.

For the projects themselves, the outcome carries operational risk. The Changamwe sewer network was still subject to arbitration and funding concerns as recently as 2024; road maintenance or improvement works under KeNHA frameworks face similar continuity questions if key collateral and working capital are removed through enforcement. Subcontractors, suppliers and site labour tied to these contracts now operate under heightened uncertainty.

The case lays bare the structural exposure built into contractor financing models that rest on long-cycle government payments. Even firms carrying active or recently active mandates on water networks, highways and housing pipelines can find themselves unable to service leveraged facilities when certification and reimbursement pipelines slow.

The court’s refusal to halt the process on the strength of those complaints reinforces that banks retain strong enforcement rights once notices mature, regardless of the public purpose of the underlying works. The sixty-five properties now head toward the hammer with the disputes that helped create the default still unresolved.