East Africa: Uchumi Creditors Now Face ‘Take It or Leave It’ Situation

Hopes to settle suppliers’ calims from cash-strapped Uchumi Supermarkets in both Kenya and Tanzania still hang in the balance.

In Kenya, the company has given its suppliers and bankers creditors two stark choices; either take 30 per cent of what the retailer owes them – and give up an estimated Ksh2.5 billion in debts owed to them – or, failing that, be prepared to lose all their money.

In a proposed recovery plan filed in court, the retail chain reveals that it is in a deep financial hole and will only survive if its creditors agree to forfeit 70 per cent of their total claims.

The court submissions show that Uchumi’s assets that are earmarked for liquidation are not enough to repay the debt. It also shows that the total claims against it will only be known after reconciliation with the creditors.

“It is believed that the verification will result in reduction of the amounts owed, thereby paving way for negotiations to obtain a 70 per cent discount on the final agreed payable amount,” reads the report signed by Owen Koimburi, the firm’s newly-appointed provisional supervisor.

Uchumi is now asking the Kenyan court to give it permission to convene a creditors’ meeting on April 23 for the tabling and discussion of the proposed voluntary arrangement. Suppliers in Dar es Salaam told The Citizen that they are currently seeking an audience with the minister for Industries, Trade and Investment and the new Kenyan ambassador to Tanzania to deliver their payment claims.

The suppliers’ Union chairman, Joseph Mlay, told The Citizen yesterday that: “We met with the minister for Industry in a meeting recently but we request an audience with him,” he said.

Mr Mlay told this paper that the suppliers would meet the minister next week so that if called on Wednesday he would be able to give details. He added that currently the suppliers were helpless.


Source link : https://allafrica.com/stories/201904010816.html

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Publish date : 2019-04-01 14:22:24

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