The financial troubles of the once vibrant giant in the retail sector in Kenya and East Africa, Uchumi, are far from being over as the retailer went down 2 billion shillings deeper according to the latest released financial results.
The retailer who is operating under the mercy of creditors has been struggling to remain afloat even as he features among companies that are trading at a negative insolvency at the Nairobi Security Exchange.
Uchumi has been in several desperate attempts to seek financial support from private investors as well as the government with financial analysts saying that the time has come for the government to intervene and bail the dying Uchumi.
The government through the National Treasury holds shares of up to 14.6 percent in Uchumi. Calls on Capital Markets Authority (CMA) to drop Uchumi from trading at the NSE have often fallen on deaf ears with the authority arguing that doing so will demoralize those who want to invest in the company.
Uchumi owes creditors a total of 7 billion shillings but its assets are worth 5 billion shillings with auditors saying that it could be even worse because the value of some assets is not worth the amount quoted. This means that if Uchumi sold all its assets to pay off its creditors, it could still be in a 2 billion-debt.
Uchumi is among other companies such as Kenya Airways and the East African Portland Cement which have been trading in the negative and at the brink of slipping into insolvency. Kenya Airways has been recovering ever since in registered a loss of more than 25 billion shillings with the loss having been reduced by more than 75 percent.
Mumias Sugar Company is also still struggling and still registering a series of losses despite a ‘bailout’ from the National Government.