The Development Bank of Ethiopia (DBE) is floating the largest foreclosure in history as they plan to sell the Turkish textile giant Ayka Addis at over 1.8 billion birr.
Ayka Addis was established in June 2006 by three Turkish individuals with 679 million Birr paid up capital and 813 million birr borrowed from the Development Bank of Ethiopia and become operational in 2010.
The factory which is located in Alemgena Town of Oromiya Regional State is some 20Km west of Addis Ababa. It makes thread, dyes garments, and makes clothing like T-shirts and sportswear. It employs 7,000 workers.
Once Ethiopia’s Textile Industry Development Institute named the company as the country’s number one textile and garment exporter for the period September 2013 to August 2014 as it exported around 63million USD worth of 70,000 readymade clothing items and other textile products to countries such as Germany, Spain, the United States, Japan, France and Canada.
Most of its export production goes to Germany with German brand Tchibo accounting for as much as 85 percent of sales.
However, the company was able to run with such success only for the first four years.
The company began claiming a total loss over 900 million birr which is above it’s paid up capital of 679 million birr.
As of April, 2018 the company took close to 1.3 billion birr loan from DBE.
Back in January this year, DBE repossessed Ayka Addis Textile and Investment Group Plc from Turkish investors as the company has failed to pay back its bank loan and Ayka Addis has been managed by Ethio Capital Investment S.C, which is established by Development Bank to manage and administer the assets of foreclosed factories and companies, until it is transferred to private ownership.
This week, DBE floated the first bid to sell the company that rests on 205,000sqm. The types of properties are listed as an integrated textile factory building, machines, auxiliaries, and material inputs.
DBE set 1.8 billion birr as the floor auction price.