Uganda has begun auctioning goods owned by Nakumatt as it seeks to recover millions of shillings owed by the cash-strapped retail chain.
Uganda starts auctioning Nakumatt goods and the worst is yet to come
The taxman has commenced auctioning goods owned by the struggling regional retail chain.
The East African reports that the Uganda Revenue Authority (URA) on Tuesday started the public auctions by selling perishable goods from two of Nakumatt’s Kampala outlets, Bugolobi and Kamwokya.
“The clearance sale has started with Bugolobi branch today (Tuesday). After, we move to Kamwokya as we continue talks with the client,” the Ugandan taxman said on its official Twitter page.
The auctions commenced despite the fact that URA said that talks are still ongoing with the retailer over possible recovery of $71,000 dues.
And it is not just the perishable goods that the authority will auction as it later said that it will advertise auction dates for Nakumatt’s non-perishable goods. The taxman is expected to wind up with auctions at the Oasis branch, also in Kampala.
In August, URA took over Nakumatt’s Kampala-based warehouse, which is also the retail chain’s headquarters in Uganda, as well as its three stores as part of the revenue recovery effort.
Nakumatt has been compounded by huge debt woes in Uganda and Kenya with several creditors surfacing to claim at least Ksh130 million ($1.2m) since March.
Suppliers in Uganda have filed court cases to recover unpaid invoices and rent arrears. The retailer is also facing two insolvency suits in Nairobi.
A Kenyan court last week gave the struggling retailer a lease of life by issuing a blanket order barring all creditors from attaching Nakumatt’s property until the insolvency suits have been determined.
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Nakumatt’s landlords—High Park Mall (Highridge), Thika Road Mall (Roysambu), Integer Limited (Uhuru Highway) and Highport Properties which has leased six godowns to Nakumatt—have all attempted to push the distress button on Nakumatt since March, before the court intervened.
The financially troubled retail chain was expecting a six-week phased injection of Sh7.7 billion from an unnamed private equity fund beginning March.
Failure to secure the funding has caused widespread product stock outs and seen it delay employees’ pay, prompting demonstrations and court action from the financially-strained workers.
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