Cash strapped retailer Tuskys Supermarket is now banking on the goodwill of creditors to avoid liquidation, after failing to pay debts.
Tuskys had been given 45 days to pay some creditors Ksh248 million in a liquidation case filed by electronics dealer Hotpoint and supported by 12 other creditors.
The period is set to expire at the end of this week and a mention set for November 17, which could see the fate of the giant retailer sealed.
It now emerges that Tuskys has been unable to pay the debt, and has instead invited creditors to a meeting on Wednesday, November 11 in a bid to agree on a “debt settlement plan”.
“Tuskys has experienced business disruption over the last six months compounded by the COVID-19 crisis. In order to return business to normalcy, Tuskys has developed a business recovery and global debt settlement plan for all category of creditors. The company is now in the process of engaging all creditors in clusters in order to build consensus and support around this plan. As part of this process the board of Tuskys now invites all service providers/creditors for an online meeting on 11th Nov 2020 at 2.00pm,” the retailer said in a notice.
Business Times is informed that Tuskys wants to rely on the “agreement” from the creditors to convince that it is committed to pay its creditors and convince them to drop the liquidation case.
Issuing the ultimatum in September, Justice Francis Tuiyott faulted Tuskys for failing to meet creditor demands in the past, puting the retailer in bad books.
“You’ve heard the concern of the creditors, they need a quick closure of the matter and you need to share information with them. I will require you to report to the court within 45 days and if you’ll not disclose the information this court will frown upon it,” the judge said.
Tuskys owes creditors at least Ksh6 billion and has been banking on a Ksh2 billion capital injection to reduce the debt burden. So far, the retailer has received only Ksh500 million from a Mauritius based investor.
Tuskys has closed most of its main branches including Tuskys Pioneer, Tuskys Ronald Ngala, Adams Arcade, Kitengela, Kakamega, Eldoret, Nairobi’s Tom Mboya branch, Kilifi, Kitale, K-Mall branch in Komarock and the Hakati branch in Nairobi.