Nakumatt, Tuskys enter merger talks
Regional retailer Nakumatt Holdings has entered into takeover talks with Tuskys as part of plans to turn around its operations.
The cash strapped retailer has been unable to secure a strategic investor to pump in much needed cash, the firm now opting to go down the merger route with its competitor.
The merger deal, which is subject to regulatory approval, has been agreed in principal with Tuskys offering financial support to reignite Nakumatt’s operations.
In the proposed deal, Tuskys will grant Nakumatt access to its supply inventory and manage operations.
The two firms are yet to give further details of the transactions.
Nakumatt has been waddling under massive debt estimated at Sh15 billion in 2015, and has over the past year failed to secure a strategic investor to inject cash into its business.
Cash strapped, Nakumatt has closed down a number of its branches with most suppliers canceling orders over delayed payments.
A report prepared by the Ministry of Trade, the Kenya Association of Manufactures and the Retail Association of Kenya shows that Nakumatt had racked up Sh552.3 million in late payments by December 2016.
The Ministry of Trade has been mediating a debt restructuring deal for Nakumatt with eight of its banks.
The Competition Authority of Kenya said the two parties are yet to submit a merger proposal.
Tuskys operates 60 stores across Kenya and Uganda.
More details to follow……
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