File Photo of an Uchumi Supermarket outlet. The troubled retailer is expected to stage a second creditors meeting on March 2 and an ultimate vote which will in principal determine the continuity of the 45 year old retailer.
UBA bank has threatened to throw Uchumi’s plan out of the window by an immediate 70 percent upfront payment on its outstanding loan accruing to Ksh.180.5 million while suggesting the shortening of the balance’s repayment in three years.
Uchumi’s turnaround strategy is premised on generating cash from the sale of its non-core assets to create liquidity for the settlement of creditors. Further, the retailer hopes to optimize its performance through the running of new systems.
Uchumi’s recovery plan is back to square one with the High Court giving directions on the holding of a second vote on the company’s voluntary agreement (CVA).
As such the troubled retailer is expected to stage a second creditors meeting on March 2 and an ultimate vote which will in principal determine the continuity of the 45-year-old retailer.
Dubbed Project Mara Uchumi’s CVA will require the blessing of the majority of shareholders and creditors respectively will a denial vote likely setting the path to liquidation.
Uchumi has previously garnered the support of suppliers and part of owned banks who agreed to different terms on their debt restructuring.
In May last year, Uchumi’s suppliers agreed to forfeit 30 percent of their arrears while further converting 40 percent of the balance to preferential shares.
Further, the suppliers elected to receive payments for the remnant 30 percent over a five-year stretch and elected to resume supplies to the retailer.
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Subsequently, three financial institutions in KCB Group, Cooperative Bank and the Industrial and Commercial Development Corporation (ICDC) agreed to a proposed 50 percent haircut on arrears with Co-op and KCB writing off a combined Ksh.656 million in Uchumi’s debt.However, the approval of the CVA hangs in the balance as the retailer struggles to on board other creditors including the Government of Kenya.For instance, UBA bank has threatened to throw Uchumi’s plan out of the window by an immediate 70 percent upfront payment on its outstanding loan accruing to Ksh.180.5 million while suggesting the shortening of the balance’s repayment in three years.As such, the acceptance of the CVA will require the convincing of creditors for a second time with some parties having possibly shifted positions since the last creditors meeting.According to Uchumi, the CVA […]
