Mobius Motors, the Kenyan automobile assembler has issued a notice stating that the company is going into liquidation.

Through a statement by Mobius’s Director, Nicolas Guibert announced a creditors’ voluntary insolvency notice that followed a stakeholders meeting held earlier on Monday 5th August.

This means that the company has initiated a legal process declaring its inability to pay off its debts. Mobius Kenya will therefore halt operations and distribute its assets to its creditors. KVSK Sastry has been appointed to oversee the liquidation process.

“At a meeting of the shareholders held on 5-Aug-2024, it was resolved to place the company under liquidation as per Section 393(1) (b) of the Insolvency Act and to appoint KVSK Sastry as the liquidator to wind up the company,” read the notice.

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Nicolas Guilbert revealed that a list of creditors and proxy forms will be available for inspection at Mobius’s head office at Sameer Business Park on Friday, August 9th. The company’s remaining assets will pay off creditors and shareholders on priority of claims.

“Notice is hereby given that a meeting of the creditors will be held on 15-Aug-2024 at 9 AM at Mobius Factory (Sammer Africa, Mombasa/Enterprise Road Junction, Nairobi) to consider, and if thought fit, to pass a Resolution approving the Shareholders’ nominee as the Liquidator of the Company as per Section 408 of the Insolvency Act.”

Mobius Kenya was founded by British Businessman Joel Jackson. The company, which launched Kenya’s first locally produced SUV in 2015, has felt the effects of Kenya’s tough economic environment.

In 2021, it sought court protection from the Kenya Revenue Authority (KRA) which demanded Sh. 73 million that had the potential of shutting down its operations in Kenya. Their court application argued that they would suffer financial loss if the charges were not suspended.

To prove their financial vulnerability since the beginning of operations, the company released all its audited financial reports. In 2019, the end-year report indicated they had a liability of Sh. 434.3 million and a shareholders deficit of Sh. 204.8 million.

In August 2020, their position had further deteriorated to a liability of Sh. 649.2 million and a shareholders deficit of Sh. 389.1 million. The high court, after a keen review of the court documents granted a stay of execution to allow Mpobius to provide a bank guarantee of Sh. 40 million.

“Looking at the audited reports produced, Mobius has made out a strong case that a payment of Sh. 73,235,647 from its resources would most probably have an adverse effect on its operations. That would be a substantial loss,” Justice Francis Tuiyott ruled.

The closure of Mobius Kenya marks the end of an era of a pioneer in the Kenyan vehicle manufacturing industry which aimed to provide affordable and durable vehicles specially designed for the African terrain.

They began by producing the Mobius I which was met with mixed reactions from Kenyans with most criticising its look despite a price tag of Sh. 1.3 million then.

Since then, the automaker upgraded and released the Mobius II and Mobius II models that were priced at Sh. 1.5 million and Sh. 3.9 million respectively.