By Nsunjo Erica
Court has given Uchumi Supermarkets Ltd six months to settle its 4.7 billion shilling debts to over 100 suppliers or face auction of its assets by creditors and eviction by their landlords.
Last week, the High Court sent Uchumi retailor a reprieve, which marked an insolvency petition against Uchumi as settled and withdrawn following an out-of-court deal with suppliers.
According to court, creditors met Uchumi representatives in March, and 121 voted to implement the Company Voluntary Arrangement (CVA) while 28 opposed the move. Three votes were spoilt.
Under the CVA, Uchumi’s creditors will have to take a 70 percent loss on amounts owed to them, and the retailer will be expected to put up a committee to ensure that debts are paid on time.
Despite opposition from UBA Bank, Justice Mary Kasango allowed the implementation of a Company Voluntary Arrangement (CVA) in March.
Justice Kasango allowed implementation of the CVA on condition that Uchumi pays all its debts within six months, and in turn, all money claims currently before the court be suspended.
According to the (CVA), in case Uchumi fails to pay up within the six-month period, it could face auction of its assets by creditors and eviction by their landlords
“In the event, the company defaults…. A person may take steps to enforce security over the company’s property only with the consent of the supervisor or with the approval of this Honourable Court; A person may take steps to repossess goods in the company’s possession under a credit purchase transaction only with the consent of the supervisor or with the approval of this Honourable Court…”
“…The company’s landlords may exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company only with the consent of the Supervisor or with the approval of this Honourable court,” the court papers read.
The collapse Of giant supermarkets in Kenya
About ten years ago, three supermarkets Nakumatt, Uchumi, and Tuskys were dominating the retail sector in Kenya.
Nakumatt Supermarket and Uchumi were giants in Kenya’s retail sector history. The two giants defined what Kenya meant in terms of retail business. Nobody ever imagined that the two, will one day be history.
As a joke, both Nakumatt and Uchumi brands started melting away. Goods started disappearing from the shelves and before we knew it, they were, dead, buried, and forgotten.