Oil and gas logistics firm Atlas Development has announced it is winding down its Kenyan operations even as the holding firm remains listed on the Nairobi Securities Exchange (NSE).
Citing low oil prices and bad debts held by clients, the company said in a filing today with the NSE that it will close the Kenyan subsidiaries and concentrate on its Ethiopian business.
Investors in Kenya will continue to hold their stake but the sustenance of the company will be reliant on business generated in Ethiopia.
“The downturn in the oil and gas industry, market adjustments and the failure of certain key clients to settle debts, together with increasing creditor pressure has led to the decision to close Kenyan operations and focus all of the company’s administrative functions and activities in Ethiopia for the time being,” said the company in the filing.
In an effort to mitigate current low oil prices, the firm recently announced that it was diversifying its business from just oil and gas logistics into industrial operations.
“This decision will enable the Company to focus its resources and management on the Company’s newly formed industrial division and its joint venture with Orchid Business Group Plc which is targeting the resources space (in particular potash development and infrastructure projects,” said the company.
Chief executive Carl Esprey said that the downturn in the oil industry had led to a situation where people are no longer willing to pay a premium on high quality services.
“Since the downturn in the oil and gas market, we have found that clients are no longer placing a premium on our high quality services and are demanding terms which are not economically viable,” he said.
