Tuskys scrambles to tap investor to steady ship

The shareholders of Tuskys supermarket are seeking to tap a strategic investor by the end of July in addition to exploring further funding options to save the retailer from collapse.

The firm has revealed this to the Competition Authority of Kenya (CAK) which has in recent months investigated buyer power abuse claims over withheld supplier bills.

“The Authority took note of these initiatives and has thereof committed that, if the retailer opts to seek a strategic investor, the Authority shall within 14 days consider and issue a determination upon the submission of a merger/acquisition application,” CAK said in a statement on Monday.

Tuskys had first indicated its intention to onboard a strategic investor as it sort to better its capital structure ahead of a potential listing on the Nairobi Security Exchange (NSE) in August 2019.

“The first thing would be to improve our internal governance structure. We would need to ensure that our structure can withstand public scrutiny upon listing. Our goal would be to present a well-capitalized company to investors as we wouldn’t want to be confronted by the suggestion that we are only listing for money,” Tuskys CEO Daniel Githua said.

Nearly one year later, the quest to tap an investor is seen as an attempt to save the retailer from a probable demise in which owes billions in supplier bills.

In the last 30 days, CAK reveals Tuskys has made receipt of payments amounting to Ksh.2.77 billion as at the end of June in addition to negotiating for moratoriums and extension of its facilities with key suppliers.

“The Authority continues to interrogate the financial statements, and management accounts availed by Tuskys, we call upon suppliers who may be aggrieved, and have not presented their matters to the CAK, to continue doing so. This will enable the Authority to establish Tusky’s accurate debt portfolio,” CAK added.

Tuskys is further entangled in a dispute with its unionised staff over planned pay cuts- a matter which has ended up in the Labour Relations Court. The retailer is expected to hold a consultative meeting with the employees on Thursday to resolve the impasse.

Tuskys CEO Dan Githua has recently ended his silence on the crisis facing the retailer insisting the supermarket will sail through current challenges even as he refutes his rumoured exit.

“The Lord will not allow Tuskys to die. ‘So Dan quietly left the sinking ship’-this is not true. You do not disembark when the vessel hits turbulence, we are finding solutions,” he said in a series of tweets last week.