Creditors of the troubled capital goods financing company Ethio Lease have been given a 30-day deadline to file outstanding claims, as the firm formally enters the liquidation process with its capital valued at 400 million birr.
According to a notice issued on Sunday by the liquidator Fekadu Petros & Partners Legal Service LLP, all creditors must submit documentation supporting any debts or liabilities owed to them by Ethio Lease. The submissions must be delivered to Fekadu Petros's offices in Addis Ababa before the end of the one-month filing period.
Failure to meet this cutoff could mean creditors forfeit their right to recoup money when the company's assets are disbursed. The liquidation process is being overseen according to Article 474 of Ethiopia's commercial law. How much creditors may recover, if anything, remains uncertain until claims are processed.
Ethio Lease received a pioneering financial services license from the National Bank of Ethiopia (NBE) in 2019 as part of economic reforms opening the market to foreign investment. However, it claimed 2021 amendments to directives made its business of writing leases in foreign currency unviable.
Explaining the withdrawal in its statement released on November 2023, Ethio Lease said the changes required all lease agreements be denominated and settled in birr instead of other currencies. But NBE Governor Mamo Mihretu rejected these assertions in an interview, saying the company was aware of borrowing policies prior to setting up in Ethiopia.
"The claims are baseless and unfounded. They are simply shifting blames," Mamo told The Banker in his interview conducted the same period on November 2033. The governor rejected Ethio Lease's reasons, stating it knew full well how to structure investments legally when receiving its license.