Hummingbird Investments sues Karibu Flour Mills over Sh48m loan

A commercial dispute in relation to a Sh47.8 million loan and interest repayment between two companies has landed in court.

Hummingbird Investments Ltd has sued grain milling company Karibu Flour Mills Ltd at the High Court in Mombasa seeking orders to have it pay the money.

According to Hummingbird Investments Ltd, pursuant to a loan agreement dated September 1, 2017, it provided a loan of Sh40 million to Karibu Flour Mills Ltd with 14 percent interest to be repaid monthly.

“Under the loan agreement, the defendant (Karibu Flour Mills Ltd) was required to clear the loan within three years with an inbuilt 12-month moratorium. Therefore, the loan was to be repaid in full not later than September 1, 2021,” case documents state in part.

Hummingbird Investments Ltd says that during the first year of repayment, the defendant was required to repay the loan interest monthly and in the second and third year of repayment it was required to pay the principal together with any outstanding interest.

The plaintiff further says that on August 24, 2018, the defendant requested it for a two-year extension period on repayment of the principal.

“The defendant therefore requested the plaintiff to extend the repayment date by changing the commencement date from August 1, 2018, to September 1, 2020,” Hummingbird Investments Ltd says.

Hummingbird Investments Ltd further says that from October 6, 2017, to December 5, 2021, the defendant repaid the interest on monthly basis and that from January 2022 to August 2022 it (defendant) did not make monthly payments on interest.

However, the plaintiff says that from September 29, 2022, to December 1, 2024, the defendant resumed its payments on interest.

The plaintiff says that on June 26, 2024, the defendant was indebted to it (plaintiff) in the amount of Sh40 million with interest at 14 per cent per annum.

Hummingbird Investments Ltd also says that on February 4 2025 the defendant further confirmed to it that interest then outstanding was Sh7.8 million.

“On August 21, 2025, the defendant stated that it would no longer repay the interest on a monthly basis as per the loan agreement but would resume repayment whenever it was in a position to do so,” case documents state in part.

Hummingbird Investments Ltd says that on November 3 last year, it requested the defendant to clear the loan interest or propose a payment plan not later than November 6.

The plaintiff says that the grain milling company refused to pay the loan necessitating it to file the case to recover the money.

“Despite demand having been made and notice of intention to sue having been duly given, the defendant has failed, neglected and continues to refuse to honour its obligations under the loan agreement,” the plaintiff says.

The case has been fixed for mention on April 22.