Ailing Tuskys Develops A Debt Settlement Plan For Its Creditors

Tuskys Supermarket says it has developed a business recovery and global debt settlement plan for all categories of its creditors following its continued business disruptions over the last six months due to COVID-19. This is in a notice issued by the retailer to its suppliers.

According to the notice, the board of Tuskys is in the process of inviting all creditors for an online meeting on 11^th November 2020 to engage and build consensus and support around the retailer’s settlement plan.

The categories of service providers expected to attend the meeting include Cleaners, ICT providers, marketing service providers, repairs and maintenance, security and loss control providers, staff welfare, printing service, vehicle maintenance, etc.

Tuskys has been facing major setbacks in business that saw indefinite and the continued closure of several of its branches from as early as April, the retailer blames to decline in business on the COVID-19 pandemic.

In April, the Supermarket temporarily shut down three of its branches in Nairobi, Kitale and Mombasa, Tom Mboya (Nairobi), Kitale Mega, and Digo Road (Mombasa).

In August, Tuskys shut down its branch located at United Mall in Kisumu after the auctioneer closed its door over rent arrears worth millions, the retail shop owed the landlord Sh26 million.

In September, The retailer was then ordered to shut down the Greenspan outlet also over rent running into 30 million shillings according to some of the creditors.

In October, Tuskys’ Shiloah branch in Kakamega shut down indefinitely marking the company’s latest retreat in the retail market on dwindling cash flows, the branch had been in operation since 2018

Putting the closure of almost all its branches aside, Tuskys has also been dealing with unpaid suppliers who later went ahead to seek intervention from the Government to ensure the retailer pays all dues owed to them.

Tuskys ‘ Suppliers ran to the government over the fear that the retailer will not pay its dues after it announced that it is facing a cash crisis due to the COVID-19 pandemic that has affected the whole economy.

Suppliers stopped supplying goods to the retailer for example KCC stopped supplying milk with claims that Tuskys had failed to settle pending bills amounting to millions of shillings for milk supplied and sold but no cash was remitted.

Earlier when the COVID-19 pandemic spiked amidst March and June, Tuskys was also being accused of defaulting on rent on most of its outlets across the country.

The retailer is had to resort to firing employees as a way of cutting on costs however, this plan also didn’t go as expected, employees filed claims of being laid off minus proper notice and that the retailer hadn’t followed government protocol.