Hope For Uchumi As Creditors Agree To Forfeit Ksh2.5 Billion Debt
Cash strapped Uchumi supermarket can breath a sigh of relief as creditors have agreed to forfeit Ksh2.5 billion debt owed to them as part of a proposed recovery plan for the retailer.
The slash on debt represents 70 percent of the total Ksh3.6 billion owed to the suppliers for goods supplied.
The suppliers will be paid 30 percent of the accruing debt, 40 percent of the debt will be converted to equity through preferential shares while 30 percent will be discounted debt.
“This is a positive development for the company. It will however be an ongoing stakeholder engagement at both the company and shareholder level,” said Mohammed Mohammed CEO Uchumi Supermarkets.
Uchumi has been facing a barrage of winding up petitions in 2018, which prompted the management to give suppliers two options; either take 30 percent of what the retailer owes them or be prepared to lose all their money.
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The suppliers seem to have bowed, to the relief of the retailer.
“Liquidation is not the best option. Suppliers can now expect some down payment on existing debt. We will now work together to see a resumption of business,” said Kimani Rugendo, Chairman, Uchumi Suppliers.
The new debt redemption will is now be pegged on the liquidation of Uchumi assets including the sale of two parcels of land in Roysambu and Lang’ata Road.
