Defunct trade finance provider Kimura Capital was owed up to US$11.3mn by collapsed commodity trading group CTCS, administrators have said.
Kimura, which has been in voluntary administration since December last year, is a secured creditor of two group companies, Continental Trade and Commodity Services Ltd and Canon Garth Ltd.
CTCS administrators FRP Advisory say in a progress report dated March 10 that “it is currently estimated that Kimura will suffer a significant shortfall from the administrations”.
London-headquartered Kimura Capital LLC offered trade finance through funds, including the Cayman Islands-registered Kimura Commodity Trade Finance Fund, which has a floating charge over CTCS companies.
The report says Kimura took steps to take control of and “realise” pledged stock assets that were security for its exposure to CTCS.
In September, before Kimura’s insolvency, CTCS administrators said they had distributed £210,000 to the trade finance provider and they understood “significant further sums are understood to have been received by Kimura directly from stock sales”.
A previous filing said Kimura had directly recovered just over US$1.2mn.
Kimura’s administrator did not respond to a request for comment.
CTCS, based in south-east England, consisted of several companies predominantly in the UK, South Africa and Tanzania that traded African soft commodities such as nuts, seeds and coffee.
It went into administration in 2022 due to what administrators described as “financial difficulty as a result of the Covid-19 pandemic” and the “related downturn in the trade of international commodities”, as well as a South African subsidiary, Sevenoaks Trading, being placed in an involuntary business rescue process.
The latter was “catastrophic” for the group because Sevenoaks was the “primary revenue generating entity”, a 2022 filing by FRP shows.
In addition to Kimura, non-bank lenders Qbera Capital, British Arab Commercial Bank (BACB) and HSBC were also secured lenders, but for much smaller amounts.
Qbera was owed US$1.45mn when CTCS collapsed, but has since recouped “significant further sums” from stock sales, according to the most recent report.
BACB was owed some £831,000 by Sevenoaks Trading, a sister company registered in South Africa.
BACB declined to comment. Qbera did not respond to a request for comment.
The market exit of Kimura, a high-profile lender in commodity trade finance, underlined the struggles faced by non-bank providers, which have been stung by defaults, fraud and market fluctuations. In March, Artis Finance, a commodities-focused receivables finance provider, entered voluntary administration.
Creditors of Kimura Capital LLC face a possible shortfall of £1.63mn, according to a January filing by administrators Evelyn Partners. Most outstanding claims come from partners who extended loans to the firm.
Ewan Kirk, founder of hedge fund Cantab Capital Partners, is owed £1mn, according to the filing.
