Tuskys Supermarket on Kenyatta Avenue in Nairobi/ Courtesy
NAIROBI Kenya, Dec 14- Tuskys Supermarket, once Kenya’s largest retailer, currently owes Sh19.6 billion to unsecured creditors, presenting more hurdles in the retail chain’s revival plans.
The troubled retailer revealed in court papers that its total assets are only able to account for Sh6.67 billion or 34 percent of debt owed to unsecured creditors.
This indicates that Tuskys owes the unsecured creditors a total of Sh19.6 billion, which is nearly ten times the Sh2.1 billion the retailer is seeking from a strategic investor for its revival.
Tuskys made the disclosure in a suit where the retailer is seeking to stop its liquidation by tens of firms under the guise that the retailer’s assets are not enough to settle majority of the monies owed.
“He states that as at June 2020, it was estimated that only Sh6.67 billion, representing 34 percent of the total sum owed to unsecured creditors as a class, would be available for distribution. He justifies why liquidation of the company in its current financial state would not offer the creditors (a large portion of whom are unsecured creditors) any reprieve whatsoever,” court documents stated.
Tuskys has hinged its recovery on the assets sale worth Sh911 million, the Sh2.1 billion from strategic and restructuring of its debts to ensure staggered payment of the creditors.
Since announcing the Sh2.1 billion deal last year, the retailer has been losing employees, stores, customers and suppliers as its cash troubles worsened.
Last week, High Court judge Francis Tuiyot gave the retailer 30 days from November 26 to reveal details of a restructuring plan that includes tapping a strategic investor for Sh2.1 billion and sale of Tuskys assets worth Sh911 million.
The judge said failure to make disclosures would likely trigger hearing of a liquidation suit, which could see the retailer wound up to allow creditors to recoup their debt after an unsuccessful rescue attempt.
The Competition Authority of Kenya (CAK) said Tuskys went quiet and failed to reveal the identity of the offshore investor more than 16 months after the retailer announced a financing deal.
The authority had in July last year said it would decide within two weeks on any investment proposal by the retailer, accelerating a process that usually takes months.
Tuskys, until recently Kenya’s top retailer with 53 stores, has less than seven outlets operating amid stock-outs. At its peak, the retailer was an acquisition target for global giants seeking a foothold in East Africa such as Walmart.
Poor management, rapid expansion and vicious fights among family members that own Tuskys hurt the retailer, opening the door for foreign chains such as France’s Carrefour and local rival Naivas to gain market share.
