The children of the late founder of Tuskys Supermarket Joram Kamau risk losing ownership of the chain retailer in Ksh2 billion deal with Mauritius-based investor.
The unnamed investor is demanding that the seven siblings place all their shares as security for the loan, which they will have to cede in case they default the loan.
Tuskys’ holding company, Orakam Holdings, through lawyer Philip Murgor has already summoned all the shareholders to a shareholders’ meeting on Monday, September 28, to sign the agreement.
“A notice has been sent for shareholders of Orakam on September 28, 2020 to validate negotiations of receiving $20 million from an offshore fund,” said Murgor in the notice.
Stephen Mukuha, Sammy Gatei, Yusuf Mugweru and George Gachwe each own a 17.5 percent stake in Orakam while John Kago, Mary Njoki and Kenneth Njeri own a 10 percent stake each.
The cash strapped retailer has in the past few months faced increasing challenges paying its workers, suppliers and bills such as rent.
Tuskys woes have seen suppliers pull out resulting in under-stocked branches with customers losing confidence in the supermarket chain
Already, Tuskys received Ksh500 million being part of the Ksh2 billion deal on September 18, meaning that the meeting could just be a formality and the shareholders will have to sign the deal.
“We have received the first tranche of the earlier announced Ksh2 billion credit disbursement today. This first tranche disbursed today amounts to Ksh500million and will cover immediate working capital requirements including partial settlements to our staff, suppliers and landlords among others. In particular the first tranche of the suppliers old debt amounting to Ksh321 million has been settled,” said Tuskys CEO Dan Githua.
Tuskys also owes suppliers more than Ksh6 billion, with 40 percent of the amount (Ksh2.4 billion) set to be paid over a period of two years, according to management.
Tuskys became the first Supermarket chain to go under the scrutiny of CAK’s buyer power department which was formed after Nakumatt holdings went down with Sh 30 billion worth of suppliers’ debt.