Uchumi Supermarket Records Negative Net worth

Uchumi Supermarkets which has been through some financial tribulations with a series of loss making appears not to be out of the woods yet as its total liabilities were way above its assets by close to 200 million shillings.

This implies that Uchumi Supermarket is currently in a negative equity and according to economic analysts, the hopes of the once vibrant retailer coming back to its feet are slowly diminishing. According to records to the Nairobi Security Exchange, Uchumi Supermarket is now listed as a firm having a negative shareholder equity balance. The other company that has been listed under the same is Kenya Airways which hit the headlines after it made losses that amounted to more than 25 billion shillings. Last month, Kenya Airways decided to sell four of its Boeing planes in order to raise the much needed cash.

When a company is having a negative shareholder equity balance, shareholders have nothing to hold on and if the companies are liquidated, shareholders will not get even a single cent. This implies that the shareholders of Kenya Airways and Uchumi Supermarkets have only their hopes in praying that the companies are not liquefied in their current state less they go home empty handed.

According to reports, Uchumi now has a debt of 6.3 billion shillings and has an asset base of 6.1 billion shillings. The retailer now has a negative equity of 181.8 million shillings. The turnaround plan for Uchumi Supermarkets which sold its assets in Uganda and Tanzania appears not to be working and now it is, together with Kenya Airways, relying on the goodwill of creditors to operate. This means that if creditors decide to take their money back, the two companies will die completely and never to recover. According to economic analysts, what has killed these two companies is corruption.

Article by Juma Fred.