Equity to Auction Tuskys CBD Branch 650 Million Equity Debt

Equity bank has put up Tuskys largest shopping store in Nairobi, to auction in an attempt to recover 650 million shillings.

“We are selling the building where Tuskys currently operates along Tom Mboya Street in Nairobi on public auction and the asking price is Sh650 million. They took a bank loan from Equity Bank that dates back to 2014 and they defaulted on payment.” a representative of Antique Auctions said.

The Tuskys Imara branch that sits on the junction of Tom Mboya Street and Accra Road is set to be auctioned on March 2.

According to the terms of the sale, a deposit of 25 percent of the total amount must be paid at the fall of the hammer or immediately after the acceptance of the bid in cash or a banker’s cheque and balance paid in 90 days to Equity Bank.

The troubled supermarket is estimated to own assets worth some 6.67 billion shillings. Tuskys however, owes creditors 19.6 billion shillings.

Surprisingly, the assets owned by Tuskys can only cover payments of Sh. 6.67 billion of the debts which are equivalent to 34 percent of the money owed to unsecured creditors.

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The move to auction the building is the latest signal of the retailer’s continuing financial distress and could trigger multiple creditors to seize and forcibly sell its assets estimated at 6.67 billion.

This is the first major auction of properties linked to Tusker Mattresses Limited, the owner of the Tuskys brand, which has so far only lost merchandise to auctioneers for rent default.

The sale of the property will likely see the Tuskys Imara supermarket closed unless the new owner chooses to retain the retailer as a tenant.

Tuskys, which was Kenya’s top retailer with 53 stores, now has less than seven outlets operating amid stock-outs.

Poor management, rapid expansion, and a vicious fight among family members that own Tuskys have been attributed to poor performance and continuous financial constraints.

This has opened the door for foreign chains such as France’s Carrefour and local rival Naivas to gain market share.