Nakumatt to propose debt conversion in recovery plan
Nakumatt Holdings is set to present a plan to creditors that will see part of the debt owed converted to equity.
This is among the scale of arrangements being worked out by the Nakumatt administrator as he works out a recovery plan that is comfortable to creditors.
Speaking during a meeting with suppliers on Wednesday, Peter Kahi, the Nakumatt administrator, said the troubled retailer is open to all options that will steer the company on a recovery path.
“At the meeting of all creditors, there will be various scenarios of how you want the company to go…..There will be that proposal of what we call a scheme of arrangements, like you convert your debt into equity and get them in as shareholders,” Mr Kahi said.
If endorsed, the move is likely to put Nakumatt under public scrutiny and enhance accountability.
“They will own shares may be the company can be taken into use, now it won’t be a family business. Timelines will be known once we finish review in two months,” he said.
With an estimated debt of Sh40 billion, Nakumatt is alive to the fact that it not be all smooth sailing and is using the period under administration to work out an acceptable deal.
“There will be the proposal we let the company just die go into liquidation, so there will be various scenarios presented it will be upon them to vote which one they want,” Mr Kahi stressed.
So far the company has expressed optimism with its restocking exercise, in which it expects to have 23 branches stocked up by mid next month.
Following the Wednesday meeting, Nakumatt said at least 200 of its suppliers had agreed to a new stocking and payment plan.
Mr Kahi said under the model suppliers would be paid within 14 days of deliveries.
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