Kenya low-cost automaker Mobius to shut down over financial struggles
TLDR
- Mobius Motors, a Kenya-based vehicle manufacturer, is facing financial struggles and will shut down operations under the Insolvency Act in Nairobi, Kenya.
- The creditors' meeting on August 15, 2024, will approve KVSK Sastry as the liquidator to oversee the liquidation process for Mobius Motors.
- Nicolas Guibert, Mobius Director, announced the decision to enter voluntary liquidation at a recent shareholders' meeting as per the Insolvency Act.
Mobius Motors, a Kenya-born vehicle manufacturer and assembler, is set to shut down operations under the Insolvency Act due to financial struggles that have prevented it from settling suppliers and paying salaries.
A creditors' meeting is scheduled for August 15, 2024, at the Mobius Factory in Nairobi, Kenya, to approve KVSK Sastry as the liquidator to oversee the process. After failing to rescue the company over the past year, Mobius Motors has decided to enter voluntary liquidation.
Nicolas Guibert, Mobius Director, stated in a notice, “At a meeting of the shareholders held on 5 August 2024, it was resolved to place the company under liquidation as per Section 393(1) (b) of the Insolvency Act and appoint KVSK Sastry as the liquidator to wind up the company.”
Key Takeaways
The news of Mobius Motors' shutdown has sparked discussions on the impact of government policies on the mobility industry and the broader East African economy. Kenya’s Insolvency Act 2015 permits companies to close if the board resolves “by special resolution that it be liquidated voluntarily.” Mobius Motors, which secured $56 million across five funding rounds, produced low-priced SUVs aimed at small and medium-sized enterprises (SMEs) in sectors such as infrastructure, agribusiness, and supplies, especially in remote areas where vehicles need to withstand rough terrains. The company's closure raises questions about the challenges faced by the mobility industry in Kenya, particularly regarding financial sustainability and the role of supportive government policies in fostering local manufacturing and innovation.
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