Companies

Uchumi pushes back creditors meeting to May

uchumi

Uchumi last November inked a deal with Jewel Complex Limited to sell its Kasarani land at Sh2.8 billion, which offered its suppliers and creditors some hope for a settlement. FILE PHOTO | NMG

Uchumi Supermarkets has postponed the creditors meeting scheduled for this month, citing delays occasioned by the time it took to get approval from court.

The retailer had earlier in its application sought court approval to hold its creditors meeting on April 23, 2019 but it has now been pushed to May 13.

The troubled firm is expected to present to the creditors its recovery proposal seeking their agreement to forfeit 70 percent of their total claims estimated at about Sh3.6 billion.

“Due to the timespan it has taken to have this matter brought to court we apply to amend prayers 2 of the motion (earlier application) so that the meeting shall be held on May 13, 2019,” the retail chain’s lawyer told Justice Maureen Odero.

Justice Odero on April 10 allowed the request to push ahead the meeting.

A report by Owen Koimburi, the firm’s newly-appointed provisional supervisor, and filed in court reveals that suppliers and banker creditors have two stark choices —either take 30 percent of what the retailer owes them — and give up an estimated Sh2.5 billion in debts owed to them – or, failing that, be prepared to lose all their money.

The court submissions show that Uchumi’s assets that are earmarked for liquidation are not enough to repay the debt. It also shows that the total claims against it will only be known after a reconciliation with the creditors.

The filings were made in response to a winding up petition against Uchumi filed in September last year by Githunguri Dairy Farmers Co-operative Society, the makers of Fresha milk, which is seek­ing to liquidate the retailer over its fail­ure to set­tle a Sh44.8 million debt.

Uchumi further reveals in court papers that it had informally approached KCB , its key banker, to discuss the possibility of entering into a deal similar to the one it is offering the suppliers.

Uchumi last November inked a deal with Jewel Complex Limited to sell its Kasarani land at Sh2.8 billion, which offered its suppliers and creditors some hope for a settlement.

But this deal has been affected by a suit pending in court of appeal in which Sidhi Investments is accusing Uchumi of reneging on the deal to sell the land to it after receiving 10 percent deposit.