Categories
Business Economy

Uchumi To Be Auctioned If It Fails To Pay Ksh 4.7 Billion Debt In Six Months

Uchumi To Be Auctioned If It Fails To Pay Ksh4.7 Billion Debt In Six Months
Uchumi To Be Auctioned If It Fails To Pay Ksh4.7 Billion Debt In Six Months-uchumi hyper [PHOTO/ COURTESY]

Cash strapped Uchumi Supermarket has been given six months to pay over 100 suppliers Ksh4.7 billion debt or face auction.

Last week, Justice Mary Kasango allowed the implementation of a Company Voluntary Arrangement (CVA) that 121 suppliers agreed to in March, that will see them take a 70 percent loss.

In the out of court agreement that had initially been opposed by UBA Bank, the retailer will form a committee to ensure the payments are made on time.

Justice Kasango ruled that all money claims currently before court be suspended to allow the payments to be made, failure to which Uchumi’s assets will be auctioned and the retailer evicted by landlords.

“In the event the company defaults…. A person may take steps to enforce a security over the company’s property only with the consent of the supervisor or with the approval of this Honourable Court; A person may take steps to repossess goods in the company’s possession under a credit purchase transaction only with the consent of the supervisor or with the approval of this Honourable Court…”

“…The company’s landlords may exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company only with consent of the Supervisor or with the approval of this Honourable court,” the court papers read.

Out of the 152 creditors who met Uchumi in March, 121 voted to implement the CVA, 28 opposed it while three votes were spoilt.

The 121 creditors will be paid Ksh1.05 billion out of the Ksh3.5 billion they are owed, according to the agreement.

The rest are owed Ksh1.2 billion, and will be forced to abide by the agreement made through majority vote, by receiving 30 percent (Ksh355 million) of what they are owed.

In its recovery plans, Uchumi was planning to sell a 20-acre piece of land in Roysambu for Ksh2.8 billion, before the Kenya Defence Forces claimed the land and occupied it in April 2019.

Leave a Reply

Your email address will not be published. Required fields are marked *