The creditors of troubled retailer Nakumatt will meet on Tuesday (7/1/2020) at Visa Oshwal centre to vote on the liquidation of the once prosperous supermarket.
According to a news report, should the creditors, who include banks and suppliers such as KCB Group, Standard Chartered, Diamond Trust Bank and Brookside Dairy Limited support the liquidation plan, Nakumatt will formally cease operations in the Kenyan market.
The meeting comes just days after Peter Kahi, the retailer’s court appointed administrator, dismissed the likelihood of saving the retailer which owes creditors approximately Ksh. 39 billion. Nakumatt owes local lenders a combined Ksh. 6.9 billion in arrears with suppliers claiming over Ksh. 10 billion in joint arrears. Suppliers such as Brookside, Outstand Logistics Limited, Norkan Investments, New KCC and Redstar International are claiming Ksh. 457 million, Ksh. 415 million, Ksh. 338 million, Ksh. 290 million and Ksh. 261 million respectively from the troubled retailer.
“The administrator is of the view that it is likely to be difficult to attract an investor to inject the substantial amount of equity required to restructure Nakumatt Holding Limited’s balance sheet due to the current high degree of financial leverage,’’ Mr. Kahi said in a statement.
“In light of the foregoing, the administrator is of the view that pursuit of wounding up option is the most feasible in the case of Nakumatt Holding Limited. This objective allows the administrator to liquidate whole of the business without taking on additional trading risks,” Mr. Kahi added.
In December last 2018, Nakumatt closed its Lavington and Prestige outlets just one month after shutting down operations at its Kisumu branch. Following the closure of the aforementioned branches, the retailer now only has three remaining operational branches in the country but that could change tomorrow depending on the outcome of the creditors’ vote.
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