Kenya Defence Forces (KDF) will forcibly acquire 3.7 acres on which Uchumi Supermarkets’ #ticker:UCHM Lang’ata branch sits, adding a fresh twist to the ownership of the prime plot that is a subject of a court suit.
The National Land Commission (NLC), on behalf of KDF, is working on the papers that will convert the land and buildings estimated to be worth more than Sh500 million for military use.
This will see the KDF entangled in a court battle that has seen UBA Bank push to auction the property over a Sh172 million defaulted loan.
The cash-strapped retailer is betting on the proceeds of the KDF sale to aid its turnaround as the bank lays ownership to the property.
“For now, we cannot comment further on the value of compensation until we receive the award letters for compensation from the NLC. We are confident that the expeditious completion of the process will go a long way in implementing the turnaround strategy," said Uchumi Supermarkets CEO Mohamed Ahmed Mohamed.
It remains a secret why the KDF is angling for the land that is adjacent to Wilson Airport, which the US government warned earlier was vulnerable to terrorist attacks due to lax security.
Wilson Airport handles about 90 percent of domestic flights that mainly comprise chartered and commercial flights to holiday destinations such as Maasai Mara Game Reserve, Mombasa, Amboseli National Park, Lamu, Kilimanjaro, Diani, Lokichogio and Nanyuki.
It is ranked among the busiest airports in terms of aircraft movement in East and Central Africa.
The supermarket says the High Court had stopped the planned sale and all pending debt recovery cases, outstanding loans, and rent claims against Uchumi, in favour of a Company Voluntary Agreement (CVA).
Under the CVA, the retailer and 121 suppliers were to form a committee and agree on how to settle Sh4.2 billion owed to them and ensure the payments are made on time.
This comes amid UBA Bank’s bid to sell the Lang’ata Road land, which the retailer used as security for the loan.The lender says Uchumi has been in default for close to four years, terming the unpaid loan a concern to both the bank and its regulators given the negative impact it has on depositors’ funds.The lender said it is in the interest of justice and fairness that it is granted permission to auction the property.Uchumi CEO reckons the retailer is committed to the voluntary agreement and the sale to KDF will give it […]