Nakumatt landlords reject Tuskys offer
8 months ago, 16 Jan 05:00
Nakumatt’s creditors have rejected an offer by Tuskys to guarantee the troubled retailer’s debts, leaving the supermarket chain’s fate in the hands of the court. Nakumatt had filed a proposal in court for Tuskys to guarantee debts with its landlords for a period of three months, but the creditors said the guarantee was not binding since it provides for arbitration in the event Tuskys failed to meet its obligations, exposing them to further dispute and risk. Nakumatt is facing scores of creditors in court, including landlords, who want the retail chain liquidated. The supermarket, however, wants the court to allow for the appointment of an administrator to run its affairs until it gets back on its feet. Tuskys had said it would inject Sh650 million for rental dues owed to 27 landlords and staff salaries, and restock Nakumatt to the tune of Sh3 billion, subject to the creditors accepting the terms and subsequently paving the way for administrators to be appointed. “We did have a meeting (with Nakumatt) presented with a draft (of the guarantee by Tuskys), reviewed it and found not acceptable,” lawyer Patrick Ogola who represented Galleria Mall in the ongoing suit told High Court judge Justice Fred Ochieng’. The case had been adjourned to allow Nakumatt to negotiate with the creditors, after the retailer told the court it had found a guarantor for its debts. On Thursday, Nakumatt revealed that the guarantor is Tuskys. Following the rejection of Tuskys as guarantor, Justice Ochieng’ directed that the application on the appointment of the guarantor proceed to full hearing. Primrose Management Limited, Sunmatt Limited, Compulynx Limited and Jade Concept Limited filed an application in December, seeking to be appointed as the administrator. The four firms claim in total they are owed by Nakumatt to the tune of half a billion shillings, which they claim will be lost if the company is liquidated since they are unsecured creditors. They told the court that the creditors are owed what constitutes only three per cent of the total debt estimated to be about Sh40 billion. Nakumatt in support of the application told the court that since December business has started picking up with supplies for the month of December fully paid up. However, it pleaded for appointment of an administrator to be allowed to take over, arguing that suppliers need to be given confidence that their goods cannot be taken away by landlords. The application was opposed by creditors who argued that no new material offer has been made. They accused Nakumatt of changing advocates in order to bring the same matter before a different Judge. Nakumatt was initially represented by the law firm of Iseme Kamau and Maema Advocates, which withdrew in December. The law firm claimed the retailer had been ignoring its legal advice.
Category: business news economy opinion markets corporate lifestyle