Local retailer Nakumatt Supermarket ceased operations on Tuesday, January 7, 2020, after creditors approved the sale of assets to clear outstanding debt amounting Ksh38 billion.
The move follows a meeting between Administrator Peter Kahi and the creditors Tuesday who approved the liquidation process in a unanimous decision.
Out of the billions owed to creditors, they will only receive a share of the Sh422 million paid by Naivas for the sale of six Nakumatt branches.
The court is now expected to issue a directive on how the process will be conducted. In a meeting, Nakumatt creditors converged in Nairobi to vote on the future of the retailer after years of push and pull.
With the retailer unable to pay an outstanding debt the creditors resolved to dissolve the troubled retailer and use the money to cover for the Ksh38 billion the retailers owes.
Emerging from the creditors’ only meeting to chat the way forward, the lenders, who include banks, suppliers, and landlords, overwhelmingly approved the decision to liquidate the retailer whose performance started going under in February 2018.
The administrator has written off Ksh1.5 billion of the receivables, leaving a balance of Ksh1.3 billion.
“There are no repayment plans for these balances; the companies frequently lend and borrow funds from each other,” the auditor said.
By February 2017, Nakumatt had 60 operational branches across the region (44 in Kenya, 8 in Uganda, 5 Tanzania and 3 in Rwanda) but had to scale down to 7 as at April 2018.
The family-owned retailer was placed under administration on January 22, 2018.
