The Kenya Revenue Authority (KRA) is set to auction Kenya Power over unpaid taxes relating to transformers imported by the struggling power distributor.
In a gazette notice on Friday, July 9, KRA gave Kenya Power an ultimatum of 30 days to clear transformers imported seven years ago, or else be auctioned.
“Unless the under-mentioned goods are entered and removed from the Customs Warehouse within thirty (30) days from the date of this notice, they will be sold by public auction on August 12, 2021,” said KRA.
The new development depicts a picture of a struggling firm, whose asset base was Ksh44.2 billion as compared to liabilities worth Ksh115.2 billion as of June 30, 2019.
This means Kenya Power is operating on a deficit of over Ksh71 billion.
According to auditor-general Nancy Gathungu, Kenya Power has remained in a negative working capital position for the third consecutive year.
“These conditions indicate that a material uncertainty exists, which may cast significant doubt on the company’s ability to continue as a going concern,” said Ms Gathungu.
Among the liabilities is a Ksh47.9 billion debt owed to electricity suppliers like KenGen and other creditors.
Kenya Power Owes Ksh23.7 billion to KenGen, Ksh19.5 billion to Independent Power Producers(IPPs), and another Ksh4.7 billion owed to Kenya Electricity Transmission Company (KETRACO).
Kenya Power reported an unaudited net loss of Ksh2.98 billion in the financial year ended June 2020, as compared to a net profit of Ksh262 million it posted in the year to June in 2019.
The company reported revenues of Ksh133.18 billion, an 18.45 per cent growth compared to Ksh112.43 billion generated in the year ended June 2019.