Tuskys has confirmed that it has signed a Sh 2 billion deal with a Mauritius based fund. The cash strapped retailer has in the past few months faced increasing challenges paying its workers, suppliers and bills such as rent.
The deal with the Mauritius fund will see Tuskys inject fresh working capital which the retailer says, will help them in the short term.
“This funding will help alleviate our current capital constraints impacted by Covid-19 and further reposition the business for increasing stakeholder’s value,” read a statement by Tuskys chairman Bernard Kahianyu.
Following investigations by the Competition Authority of Kenya (CAK), the supermarket chain was instructed to pay off Sh 2.7 billion owed to suppliers in June, with a further Sh 2.4 billion required to be paid over a period of two years.
Last month, a transaction adviser with the company disclosed that the retailer was seeking to sell a majority stake to a private equity firm and an undisclosed foreign retailer as it struggled to stay afloat.
In today’s statement, the troubled supermarket chain expressed optimism and their resolve to sort out out the capital challenges it is experiencing.
Tuskys woes have seen suppliers pull out resulting in under-stocked branches with customers losing confidence in the supermarket chain. Last week, Tuskys was forced to pay Sh 15 million out of Sh 26 million in rent arrears to avoid auctioning of assets in its Kisumu branch. The Nakuru outlet was also advertised for an auction earlier this month in efforts to recover pending arrears.
The supermarket chain’s troubles have been riddled with mismanagement, theft and rumours. Tuskys woes have also been attributed to internal wrangles and sibling rivalry who are also the shareholders.
It is still not clear whether the Mauritius fund involve a share sale as part of its agreement.
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.