It will be irresponsible for us to quit now, Uchumi bosses say

Uchumi Supermaket’s shelves at Mombasa’s Moi Avenue in Mombasa County on April 24, 2018. At the intense seven-hour annual general meeting (AGM) that saw Uchumi survive liquidation last week, Catherine Kamuri was asked to start the function with a “word” of prayer. Ms Kamuri had been Uchumi’s supplier for 15 years and was one of the creditors who would come to cast their vote. In a fiery prayer, Ms Kamuri sought God’s wrath on those who mishandled funds or were responsible for the fall of the retail giant. Prayers are all the estimated 3,000 suppliers owed almost Sh5 billion by Uchumi can rely on. Majority of them are individuals and old whose lives have been ruined by the fall of the retail chain. Some had taken bank loans and were auctioned due to defaults. They are the unsecured creditors and had Uchumi been wound up, they would have walked home with empty pockets. Under the Company Voluntary Agreement (CVA) that seeks to restructure Uchumi debts and lay out a path to improving the retailer’s liquidity, the unsecured creditors will take a 30 per cent haircut. In its new operational model, Uchumi is paying suppliers weekly. “We don’t want to over-commit because we are coming from a background of not fulfilling promises,” said Uchumi Chief Executive Mohamed Mohamed. He observed that suppliers, especially the small ones, were the reason he got out of bed in the morning, having seen them cry in AGMs. “Those tears have touched my heart, so I just asked them to pray for me to be able to live up to their expectations,” he said. The suppliers will be paid Sh1.4 billion over six years on an annual basis, Sh1.4 billion discount and the rest Sh1.9 billion will be turned into noncumulative convertible preferred shares. Strangely, the bigger suppliers didn’t care about the future of Uchumi and were comfortable with whatever decision. Uchumi Chairman John Karani spoke about how the job was taking a toll on the retail giant’s management. At some point, together with Uchumi Mr Mohamed, they had almost quit. He says that taking up the job had been an agonising decision. “I was very reluctant to take up this role as chairman of Uchumi. I have had a career of over 30 years in the blue-chip companies. I asked myself; should I really risk that with a brand that has been wounded … […]

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