Debt-saddled Uchumi on Thursday received a major reprieve after the High Court gave the retailer additional 30 days to conclude talks with secured creditors on agreeing to the Company Voluntary
In a statement, Uchumi CEO Mohammed Mohammed said that the struggling retail chain has so far managed to get KCB, Co-operative Bank and ICDC to endorse the CVA under various terms.
The management, Mr Mohammed mentioned is still in talks with the government which has a 14.6 per cent stake and UBA Bank which has been seeking to dispose of Uchumi’s land to settle a Sh172 million debt.
“We are working tirelessly to reach an amicable solution that will revive Uchumi and are confident that we will get the support from all our stakeholders,” said Mr Mohammed.
The Company Voluntary Arrangement (CVA) provides a proposed review of the restructuring of the current debt as well as the strategic overview of the business operations of the retail chain that has been undertaken by the Board and Management of Uchumi and other experienced consultants including Mr Owen Koimburi who was appointed as the Provisional Supervisor on March 20, 2019.
“We are confident that the CVA presents the best proposal to ensure that all our creditors including suppliers, lenders, staff and other service providers are able to receive their dues in a timely and orderly process while positioning Uchumi for the next phase of its growth,” added Mr Mohammed.
Mohammed added that whereas Uchumi and the retail sector is facing challenging times due to reducing purchasing power and rising operational costs, the CVA has taken these factors to present a clear blueprint that will better shield the business from these risk.
In October, the High Court again issued orders preventing its landlords from evicting the retailer from the few buildings where it still operates.
Justice Mary Kasango also issued orders restraining UBA Bank from disposing off the land on which Uchumi’s supermarket sits in Lang’ata.
“An injunction is hereby granted against any eviction or the interference of the quiet enjoyment of Uchumi Supermarkets at all and any of the premises it occupies pursuant to a lease, tenancy agreement, license and, or controlled tenancy pending hearing and determination of this petition or further orders of the court,” Justice Kasango ruled.
Last year, the retailer inked a deal with Jewel Complex Limited to sell its contentious Kasarani land at Sh2.8 billion. The Kenya Defense Forces (KDF) has since claimed ownership of the land.
The land ownership row is now in court.