It's game over for KFC Botswana

Lobatse High Court Judge, Michael Leburu has confirmed the winding up of the cash-strapped Kentucky Fried Chicken franchise in Botswana after First National Bank Botswana (FNBB) rushed to court demanding the winding up of the company.

This comes after the KFC Botswana was placed under provisional liquidation. In his founding affidavit, FNB Chief Executive Officer Steven Bogatsu argued that KFC Botswana is commercially and factually insolvent and should be wound up. He said KFC Botswana is in breach of a loan agreement in the region of P40 million.

The four respondents (VPB Propco (Pty) Ltd, QSR Food Company, Boitumelo Dijo and Greenex) are a group of companies that operated the KFC franchise business from 12 stores in Botswana. Justice Leburu said the respondents have failed to put any outline or business plan, in whatever form that may evince some possible resuscitation of the respondents if given a chance. “In other words, the pursuit of other objects or business opportunities, in my view, is not a viable proposition when one has regard to the pervading insolvency,” said Justice Leburu.

According to the loan agreement, the 1st respondents are indebted to the petitioner (FNBB) in the sum of P40 million and are in arrears in the sum of P1 million after failing to pay two monthly installments. “In my judgment, this is a clear case in which the provisional order for the liquidation of the respondents should be confirmed and made absolute, as I hereby do. Even an alternative remedy for judicial management is not justifiable in casu,” said Leburu.

But KFC Director Anthony Siwawa did not take kindly to FNBB’s decision to approach the court to have the business liquidated, denying that his entity is insolvent. According to Siwawa, KFC Botswana has serviced the loan well and has in the past two and half years paid close to P8 million in principal and close to P7 million in interest.

Meanwhile the court case means those who have been willing to buy the cash strapped KFC would now have the opportunity to buy. There are rumours that close to 28 companies have submitted to rescue the ailing franchise.  During its difficult times, KFC Botswana closed some of its outlets.