Kuros Construction Faces Financial Crisis Despite Rs22M MIC Controversial Aid

Kuros Construction Solutions Ltd, a prominent player in Mauritius’s construction sector, has reported a staggering revenue of Rs 1.16 billion for the fiscal year ending June 30, 2024. Yet, beneath this facade of commercial success lurks a grave financial crisis, characterised by crippling debt and negative equity. This unsettling reality is made even more pronounced by the substantial support of Rs 225 million provided by the Mauritius Investment Corporation (MIC), intended to fortify the company’s stability and ongoing projects.

Established in 2013, Kuros Construction Solutions has made its mark by delivering over 300 high-end residential units through various development schemes, as well as undertaking the construction and renovation of more than 450 hotel rooms.

However, despite a bustling operation, the company found itself ensnared in a precarious financial situation.

For the year ending June 30, 2024, Kuros’s revenue stood at Rs 1.16 billion, showcasing robust commercial performance.

However, after accounting for sales costs amounting to Rs 1.01 billion, the gross margin rests at a mere Rs 157 million.

This smaller figure is severely impacted by administrative expenses of Rs 74.2 million and financial charges tipping the scales at Rs 64.3 million—monikers of alarming debt levels.

Even though the company reported a net profit of Rs 20.47 million, it grappled with a structural financial imbalance primarily due to an over-reliance on external financing.

The company’s balance sheet painted a dire picture, with total liabilities reaching Rs 1.77 billion, including Rs 1.26 billion of short-term debt.

These obligations overshadow total assets of Rs 1.73 billion, resulting in a troubling negative equity of Rs -36.65 million.

Notable financial obligations included long-term liabilities of Rs 493.1 million, tied to heavy borrowing and vulnerability to cash flow fluctuations.

Furthermore, supplier debts of Rs 715.8 million indicatedsignificant payment challenges with business partners, while short-term liabilities total Rs 553.7 million, placing immense strain on liquidity management.

Kuros’s high debt levels and negative equity threaten its capacity to meet payroll and contractual obligations.

This vulnerability raised pressing questions regarding the company’s long-term viability, particularly concerning the utilisation of the Rs 225 million proffered by the MIC.

A Paradox of Funding and Financial Woes

Caught in the eye of controversy, Kuros Construction Solutions, which received Rs 225 million from the Mauritius Investment Corporation, found itself grappling with accusations of financial mismanagement.

The company attributed its difficulties to payment delays from government contracts, yet it has pledged to settle outstanding salaries through a structured plan following mediation from the Ministry of Labour.

This injection of Rs 225 million was meant to ensure the continuity of Kuros’s operations and fund ongoing projects, including social housing developments under the National Social Living Development Ltd (NSLD).

However, despite this financial lifeline, the company has reportedly failed to pay its workers, igniting doubts about both the application of these funds and the overall financial health of the firm.

Critics have raised concerns about the lack of transparency surrounding the MIC’s funding and its subsequent management.

Questions linger about the oversight exercised by authorities and the controls in place to ensure that public funds are utilised effectively and in alignment with intended goals.

Selven Warden, Managing Director of Kuros Construction Solutions, has stated:

“The terms of repayment and the status are confidential matters between the MIC and Kuros.”

Notably, a document has surfaced suggesting a potential connection between the former Minister of Finance and Warden himself.

Just five months ago, Kuros was seeking to expand its workforce, as evident from a social media post proclaiming:

“Join our growing team at Kuros Construction Solutions.”

However, in a dramatic twist this February, the fate of 750 workers hung in the balance as uncertainty loomed over their employment.

Warden has assured that salaries will be paid by February 28, 2025, while ardently denying any dismissals.

“This is false and malicious. I confirm that no one has been fired,” he stated to *Défi Quotidien*.

The Rs 225 million funding from the MIC, highlighted in the institution’s annual report for the year ending June 30, 2023, calls into question the company’s current state and raises legitimate concerns about why these 750 employees remained unpaid.

Warden asserted that requests for the funds were made based on fulfilled project requirements and submitted documentation.

“All figures can be found in the MIC’s annual report,” he insisted.

Critics also ponder whether a feasibility study justified the funds lent by the MIC to Kuros.

“It seems that certain individuals’ close connections with outgoing authorities might have played in their favour.

Why is it that out of all struggling businesses, this one received MIC support?” questioned a construction industry insider, hinting at potential misuse of funds for hotel construction in the North.

In light of these events, Warden clarified that Kuros is an entrepreneurial initiative he established in 2013, boasting 25 years of experience in the construction sector.

“We grew from seven employees in 2013 to achieving Grade A status in 2021, servicing primarily private sector projects. To attribute our hard work to an alleged political connection is absurd and misleading,” he asserted.

The only public sector project Kuros has participated in, he claims, is the NSLD venture alongside 11 other Level A contractors.

A Crisis of Confidence

As the clouds of uncertainty gather over Kuros Construction Solutions, the questions mount: What future lies ahead for the company and its employees?

Will the support it received translate into stability or further financial strife? As the story unfurls, one can only hope that the storm abates, revealing a brighter path ahead.

Company Projects & Events:

–North Island View at Grand Gaube (2024): A PDS project developed by Keon Properties and constructed by Kuros.

–Kalodyne Bay: Another notable project.

–Keon Properties: Established as an extension of Kuros Construction Solutions, with Selven Warden serving as Managing Director.

–Kuros Construction Solutions Ltd: Founded in May 2013 and commenced operations in July 2013.

–Managing Director: Selven Warden, in position since June 2013.

–Company Size: Employing over 10,001 personnel.

–Head Office: Located at 10A Seraphine Street, Port-Louis, Mauritius.

Source: Defi Media