Damning details have emerged on the true financial position of East Africa’s largest retail chain.
The shock of Nakumatt's $289.1 million debt
Details have emerged of how East Africa's largest retail chain is reeling under a debt worth millions of dollars.
The region's premier supermarket is on its knees having been faced by financial problems coupled by closure of a number of its stores due to non-payment of rent.
And even as it seeks cash injection from the government, information has now emerged on the debt position of the region’s largest retail chain.
According to a senior Government official, the supermarket is now lurching under a massive $289.1 million debt.
This compounds more to its financial woes and makes it even more difficult for the recovery of the regional retail chain whose debt position in the public domain has been put at $173.4 million.
The details came to light when Nakumatt’s management was required to disclose its true financial position to the Government when it sought its intervention in regaining stability.
“The retailer was just opening branch after branch by piling debt. It chose to grow at other people’s expense,” said the official.
The damning details also revealed that Nakumatt owes suppliers $144.5 million whereas a number of banks are seeking to recover $77.1 million.
Meanwhile, Unilever, that stocks fast-moving consumer goods suspended supplies in the wake of piling debt. Likewise, Kenya’s largest alcohol beverage company East African Breweries also cut its supplies.
The retail chain also had a clash with Kenya’s Thika Road Mall over unpaid rent worth $491,566.
Some lenders can even go down if we do not move carefully. Some SMEs that had lent to suppliers will also suffer,” said the source adding that the retailer’s financial problems could trigger a chain reaction in the financial sector.
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