Troubled retailer files for administration to stave off creditors
At its height, the company, which began life as the Nakuru Mattresses store, had more than 60 outlets across Kenya, Uganda, Tanzania and Rwanda.
Nakumatt which at the height of its dominance was East Africa’s biggest supermarket chain with branches across the region, was forced to file for administration after more and more creditors including landlords and suppliers have moved to court in recent months seeking to wind up the business due to non-payment of debts running as much as 20 billion shillings ($193 million).
In January, the managing director of the chain, Atul Shah, told Reuters the debt then stood at $150 million.
“The Nakumatt directors are optimistic that the court will make the administration order in relation to Nakumatt, as the order will enable Nakumatt achieve a better outcome for its creditors,” the company said in a statement on Monday.
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If the order is granted, it will allow Nakumatt to be maintained as a going concern by a court-mandated administrator, the company added.
One source close to the retail chain said the chain needed about a year under administration to pay off its debts and could then emerge as a viable, leaner chain with 10-20 stores.
Nakumatt added in its statement that its historical rival, Tuskys which has proposed a merger to resolve Nakumatt’s problems was willing to support it while under administration.
At its height, the company, which began life as the Nakuru Mattresses store, had more than 60 outlets across Kenya, Uganda, Tanzania and Rwanda.
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But over the past year its financial woes have led to empty shelves and store closures.
The High Court will hear Nakumatt’s application for administration on Nov. 8.
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