Uchumi Supermarket could be on the verge of a painful death just months after Nakumatt exited the market.
The troubled retailer has asked the Ministry of Trade to intervene or risk having the home-grown brand go under.
The retailer now wants the government to support a plan dubbed the Company Voluntary Arrangement (CVA) because the other alternative will be liquidation, which it argues will be of no benefit to the unsecured creditors.
It is also staring at the loss of the Lang’ata Hyper through a forced sale by UBA Bank.
“Only the secured creditors will benefit. GoK (Government of Kenya) is also at risk of having its secured amount reduced in the event that UBA proceeds to sell Lang’ata Hyper at Force Sales Value,” a letter by the retailer to Trade Principal Secretary Chris Kiptoo reads in part.
“This will happen if the CVA application is not successful,” Uchumi Chief Executive Mohamed Mohamed adds.
To stop it from sliding into more dangerous territory, the retailer wants the ministry to give it a moratorium and help it waive accrued interest and stop further charging of interest on its Sh1.2 billion loan.
It also wants the Trade ministry to engage the Attorney General’s office to help it resolve the ownership dispute surrounding a land in Kasarani land which is also claimed by the Kenya Defence Forces (KDF).
It is also struggling to pay taxes, which has put it at war with the Kenya Revenue Authority (KRA).
“Please note as follows: Uchumi Supermarket requests GoK to…assist in further engaging KRA to take into consideration our proposed payment plan for the tax arrears,” the letter says.
The retailer also wants the ministry to support a government entity initiative to purchase the daily consumables at its outlets, especially the one on Aga Khan walk. If these initiatives come a cropper, and they look set to fail, then the retail chain will lose its last line of survival.“Further to the above, please take note that in the unfortunate event where Uchumi Supermarket PLC faces closure, then we risk losing ownership of the land through the High Court,” says Mohamed. The matter is at the High Court where Sidhi Investments is suing Uchumi for performance. CLEARANCE SALE Prior negotiations with the principal of Sidhi Investments had reached an out-of-court settlement of Sh841 million. The retailer had appealed the matter but it was dismissed with costs.The collapse of two of what were once the biggest supermarkets in […]
