Banks, suppliers rope in trade ministry to mediate Nakumatt payment delays
The Ministry of Trade and Industrialization has been called in to mediate talks between Nakumatt Holdings and its creditors as concerns mount over unpaid dues.
Bankers, suppliers and retailers have all petitioned the ministry of trade to intervene on their behalf to have Nakumatt settle outstanding debt running into the billions.
The concerns come amid Nakumatt’s inability to secure funding to the tune of Sh7.5 billion that has led to a massive cash crunch for the retailer.
The creditors met with Trade Principal Secretary Dr Chris Kiptoo to weigh in on the matter.
“PS Trade @Kiptoock (Chris Kiptoo) wants retail supermarkets to uphold business ethics. Govt. wont bail out those which fail in their financial obligations,” reads a tweet on the official Ministry of Trade twitter handle following the meeting.
This is not the first time the ministry of Trade has been called in as a mediator after playing a similar role last year to ease pressure off Uchumi Supermarkets.
In December the National Treasury released Sh500 million to Uchumi as part of a bailout package.
Nakumatt Chief marketing officer Andrew Dixon says despite the current challenges, top management have already put in place a restructuring plan to weather the storm.
“It’s always very difficult to say how long these things are going to take because they are not within our control. But I would anticipate that it will take weeks rather than months,” Mr Dixon told Citizen Digital.
According to ministry officials, suppliers are owed in excess of Sh48 billion and are now calling for regulations that will in future guide relations with retailers.
A source privy to the meeting indicates that suppliers are pushing for the creation of an enforcement and regulatory office in the hopes of regulating the sector and cushioning suppliers from overdue payments.
Nakumatt has been on a restructuring phase with the hopes of saving Sh1.5 billion annually.
The plan involves optimal stocking of goods with quick turnaround, closing non performing branches as well as looking for ways to keep overheads down.
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