Nakumatt handed lifeline with administration order
Ailing retailer Nakumatt has been handed reprieve after the high court granted the firm an administration order blocking possible liquidation.
The move gives Nakumatt headroom to structure a recovery plan even as creditors and suppliers push to be paid their dues.
Justice Fred Ochieng in his ruling said he had allowed the application to make it would easy for Nakumatt to manage on the payment of its creditors if an independent administrator is appointed.
It is hoped and expected that the administration Order if properly executed, will be beneficial to all the creditors,” he said in his ruling.
With the administration order, PKF Consulting’s Peter Kahi will come on board as the independent administrator to steer recovery efforts.
Mr Kahi now has 60 days to bring together creditors and suppliers together and draw up a strategy on payment and present a recovery plan.
The administration order also buys Nakumatt some time with its landlords who have been seeking to evict it from their premises over failure to pay rent.
Nakumatt had applied for an administration order last year, proposing the appointment of Mr Kahi as an independent administrator to perform its functions in the interests of its creditors.
Through its lawyer, Nakumatt had said if the company is put under an administrator, it will be able to come back on its feet and pay its creditors.
Mr Kahi will help creditors recover their business under one administrator.
Nakumatt creditors had initially opposed the move to administration but were backed by a number of suppliers seeking to recover their funds.
Primerose Management, Compulynx Limited, Jade Concepts and Sunmatt Limited had moved to court also seeking administration of Nakumatt.
Nakumatt has been struggling under a mountain of debt estimated at Sh40 billion that has seen it already lose a number of its key outlets for failing to meet rent payments.
The retailer has been brokering a deal with Tuskys through a proposed merger in an effort of staying afloat.
Tuskys agreed to guarantee part of its debt and even brokered a deal with a number of suppliers to resuming stoking Nakumatt as it implements a recovery plan.
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