Uchumi supermarket on Aga Khan Walk Nairobi. The retailer has been ordered to clear Sh4.7 billion debts in six months. PHOTO | FILE | NATION MEDIA GROUP The retailer last week got a reprieve from the High Court, which marked an insolvency petition against Uchumi as settled and withdrawn following an out-of-court deal with suppliers.
Should Uchumi fail to pay up within the six-month window, it could face death as eviction and repossession of stock will leave the retailer as a shell.
Uchumi Supermarkets Ltd has been given six months to settle its Sh4.7 billion debts to over 100 suppliers or face auction of its assets by creditors and eviction by their landlords.
The retailer last week got a reprieve from the High Court, which marked an insolvency petition against Uchumi as settled and withdrawn following an out-of-court deal with suppliers.
Despite opposition from UBA Bank, Justice Mary Kasango allowed the implementation of a Company Voluntary Arrangement (CVA) that 121 suppliers agreed to in March.
Under the CVA, Uchumi’s creditors will have to take a 70 per cent loss on amounts owed to them, and the retailer will be expected to put up a committee to ensure that debts are paid on time.
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Justice Kasango allowed implementation of the CVA on condition that Uchumi pays all its debts within six months, and in turn, all money claims currently before court be suspended.
“In the event the company defaults…. A person may take steps to enforce a security over the company’s property only with the consent of the supervisor or with the approval of this Honourable Court; A person may take steps to repossess goods in the company’s possession under a credit purchase transaction only with the consent of the supervisor or with the approval of this Honourable Court…”
“…The company’s landlords may exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company only with consent of the Supervisor or with the approval of this Honourable court,” the court papers read.
Should Uchumi fail to pay up within the six-month window, it could face death as eviction and repossession of stock will leave the retailer as a shell.UBA had claimed at a creditors meeting in March that Uchumi falsely classified KCB and Cooperative Bank as secure creditors.Secure creditors have a hold on assets as collateral, which can be auctioned to recover debts in the event of default. UBA […]
