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Report: Choppies Supermarket had loans worth Ksh850 M from Kenyan banks

Choppies Supermarket had loans worth Ksh850 M from local banks

Botswana based, Choppies Supermarket has revealed it had loans worth KSh.850 million from local banks by the time it ended its operations in Kenya in October 2019.

The retailer which is now defunct in Kenya, revealed it had obtained a Ksh.300 million overdraft facility from the United Bank of Africa (UBA) Kenya.

In a report, it further said it has a Ksh.300 million bank facility with Absa Kenya which it had tapped to finance expansion operations.

Reports in local media shows tha the retailer reveals it obtained a Ksh.250 million overdraft facility from I&M Kenya to finance working capital over a five-month period- a facility guaranteed by Shanta Retail Holding- a minority shareholder in the chain.

A month later, the retailer would tap an additional Ksh.430.8 million facility from the minority shareholder before opting out of the local scene in October.

Choppies now discloses it has disposed all of its Kenyan branches but one while employing the proceeds to clear its liabilities.

Its operations for the year ended June 2019 through Choppies Enterprises Kenya and Choppies Distribution Centre ended up in a trading loss of Ksh.889.1 million forcing management to pull the plug.

The chain sighted difficult market conditions and a constrained cost structure of stores for its woes.

Frozen accounts

The Botswana holding company- Choppies Enterprises Limited wrote impaired the Kenyan investment at a cost of Ksh.1.7 billion (BWP 178.9 million)

In April, Kenya Revenue Authority (KRA) won a case against the cash strapped retailer to have its bank accounts worth Ksh173 million frozen.

The taxman worn the tax row against the retailer at the High Court months after it moved to court seeking orders to have KRA unfreeze its bank accounts.

Choppies entered the Kenyan market in 2016 after spending Kshs 1 billion in taking over Ukwala Supermarkets limited on September 6, 2019 and had 15 branches across the country.

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