Nakumatt resolution to wait as liquidation is extended to February 2021


Nakumatt resolution to wait as liquidation is extended to February 2021
File Photo of Nakumatt Mega City.

In Summary

  • Cognizant of the low proceeds, banks who make up the defunct retailer secured creditors have gone for properties linked to former Nakumatt CEO Atul Shah with KCB, Diamond Trust Bank, Stan Chart and the Bank of Africa (BOA) presently embroiled in an auction row to recover debts estimated at Ksh.7.5 billion.
  • Nakumatt creditors voted to liquidate the retailer on January 7 this year in an outcome backed by liquidator Peter Kahi who mooted a new turnaround strategy indicated it would be unrealistic given the firm’s pre-existing financial leverage.
  • A post mortem of the defunct retailer revealed a number of business un-wise issues including unsecured director loans, unexplained stock write-offs and employee pilferage.

The resolution of creditors’ debt in the defunct Nakumatt Holdings Limited (NHL) is set to wait longer following High Court’s extension of the liquidation last week.

In a ruling made on Thursday, Judge Alfred Mabeya extended Nakumatt’s administration to February 10, 2021.

The liquidation process is expected to close by the issued date with the company’s administrator Peter Kahi filing a final report on the process with the High Court.

The extension follows a request by the Parker Randall administrator who sighted a lengthy wind up process which was further exacerbated by COVID-19 disruptions.

The resolution of Nakumatt however hold little promise for the majority of creditors with the sale of remnant branches last year having only raised Ksh.422.5 million against an outstanding debt estimated at Ksh.38 billion.

Among the first charge items from the available cash will be administration fees and staff salaries leaving an even leaner purse for the majority of creditors.

Cognizant of the low proceeds, banks who make up the defunct retailer secured creditors have gone for properties linked to former Nakumatt CEO Atul Shah with KCB, Diamond Trust Bank, Stan Chart and the Bank of Africa (BOA) presently embroiled in an auction row to recover debts estimated at Ksh.7.5 billion.

Nakumatt creditors voted to liquidate the retailer on January 7 this year in an outcome backed by liquidator Peter Kahi who mooted a new turnaround strategy indicated it would be unrealistic given the firm’s pre-existing financial leverage.

A post mortem of the defunct retailer revealed a number of business un-wise issues including unsecured director loans, unexplained stock write-offs and employee pilferage.

Nakumatt had entered voluntary supervision in early 2018 as it sought to protect itself from its creditors.

Of the Ksh.38 billion in estimated debt, about Ksh.20 billion is owed to suppliers with the balance composing of arrears to landlords, banks and unsecured investors to its commercial papers.

Several attempts to resuscitate the retailer before the eventual liquidation including the inclusion of foreign investors and a planned merger with the now troubled Tuskys all fell through marking the end for the 33 year old supermarket chain.

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Story By Kepha Muiruri
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