Trade PS reaches out to banks to restructure Nakumatt debt
The government has once again met a group of lenders owed Sh8.5 billion by beleaguered retail chain Nakumatt in a bid to persuade them to go easy on it.
In the latest of a series of meetings by government to mediate between Nakumatt supermarkets and its creditors, Trade Principal Secretary Dr Chris Kiptoo chaired a meeting with eight banks to work out an alternative and painless method of recovering monies owed to them.
The eight banks include DTB, KCB, Ecobank, Standard Chartered Bank, Habib Bank, GT Bank, Bank of Africa and are said to have lent money to the retailer over the years that they now seek to recover as the fortunes of Nakumatt continue to dwindle.
Aside from the banks, the government will also separately meet suppliers to the chain store hoping that they too will agree to go easy on the close to Sh30 billion owed to them.
Already some of the suppliers have instituted legal proceedings against the firm seeking the help of courts to recover what is owed to them.
Gold Crown Beverages, processor of Kericho Gold, has filed an insolvency petition against retail chain Nakumatt holdings for its inability to pay Sh60 million while Africa Cotton Industries is seeking to recover Sh11 million.
In previous interviews, Nakumatt chief marketing officer Andrew Dixon attributed its misfortunes to among other things, fraud by staff that has left it cash strapped.
More recently, employees of the chain declined a proposal to have their salaries paid on a weekly basis as they seek for long term solutions to their financial woes.
The government has already mooted a code of practice that it hopes will see the country’s retail industry play by and avoid woes currently bedeviling Nakumatt and Uchumi supermarkets.
“We can’t be handling Nakumatt and the other day it’s Uchumi, it creates a moral hazard. We need a proper regulatory framework in place and this is what we are going into” Dr Kiptoo said.
Dr Kiptoo has however ruled out the possibility of injecting government cash to save Nakumatt.
The regional retailer is yet to finalize a deal with a strategic investor expected to pump in funds further straining relations with suppliers.
For Citizen TV updates
Join @citizentvke Telegram channel
Video Of The Day: On Viusasa, now you can download your videos and play them back later