- 508 views
The curtains have finally fallen on Nakumatt after creditors on Tuesday voted to dissolve the former giant Kenyan retail chain.
The liquidation process was approved during a meeting between Peter Kahi, the court-appointed administrator of the troubled supermarket and creditors. 97 percent of the 169 creditors present at the meeting in Nairobi voted in support of the dissolution of the retail chain, putting to an end the Nakumatt brand.
The supermarket was placed under administration in January 2018 in a bid to recover KSh38 billion it owes creditors, including banks, suppliers and landlords but the move did not work. Kahi said they are planning to appoint a liquidator who will pursue companies and individuals that owe Nakumatt and pay off secured creditors, including banks, which are owed Sh13.2 billion.
“An attempted turnaround of the business would be very costly and the company is likely to be lossmaking for the better part of the turnaround window, implying that such a turnaround would need to be financed by additional debt to sustain operations before achieving break-even,” said the notice on creditors’ voting.
“The company also has no assets to collateralize such additional funding. The administrator is of the view that it is likely to be difficult to attract an investor to inject the substantial amount of equity required to restructure NHL’s balance sheet due to the current high degree of financial leverage.”
At its peak, Nakumatt had over 60 branches across Kenya and East Africa having grown from a mattress shop in Nakuru. The retail chain was forced to close down dozens of outlets from 2017 as it struggled to repay its suppliers, landlords, and other creditors.
By September 2018, the supermarket had remained with only six branches in Kenya, which have since been sold to Naivas Supermarket. Naivas paid KSh422 million for Nakumatt’s remaining assets, outbidding rivals Chandarana which offered KSh246 million for the six stores while Tuskys offered KSh70 million for three branches.