Fred Aminga @faminga
A meeting which was expected to creditors of troubled Nakumatt yesterday ended in disarray as the creditors dismissed the administrators proposals to them. The creditors who include suppliers, landlords and banks are collectively owed Sh35.8 billion, was meeting with the struggling retailer’s administrator to weigh on strategies expected to fast track turn around and payments to creditors.
The administrator, PKF consultant Peter Kahi who was handed administration powers after a High Court decision tried in vain to outline cost cutting and downsizing initiatives expected to generate some funds for the supermarket. Kahi said since debt levels were unsustainable compared to turnover, it was difficult to continue servicing debt.
He proposed debt waiver or conversion to equity to the creditors meaning that they would take longer to get their cash, if proposals went according to his plan. However, while outlining his plans Kahi told disbelieving creditors at Westlands Oshwal Centre that as it currently stands Tuskys was Nakumatt’s only lifeline.
With banks having developed cold feet, the firm currently gets about 60 per cent of its supplies through Tuskys despite a Competition Authority of Kenya (CAK) anti-competitiveness investigations.
“We are currently working with Tuskys and awaiting CAK’s green light. Tuskys is our only key in my view since banks can not come near Nakumatt,” he said, adding that even getting suitors was a problem. But most of the suggestions did not go down well with creditors some of whom questioned Tusky’s financial position.
They also wondered why the administrator was committing them to issues which they thought he did not want to bear responsibility for. “PKF shall have no liability or responsibility to the extent that any information supplied to it or representations made to it, or on the basis of which this document has been prepared, is inaccurate, incomplete or misleading,” said Kahi in a report circulated to the creditors.
The creditors who had remained behind agreed to pick a committee of five which will work with the administrator to pave the way forward and report in fourteen days.