Owners of Nakumatt Holdings will cede 51% stake in the company if the deal to merge with Tuskys Supermarkets is approved by the Competition Authority of Kenya, as per the bankruptcy proceedings at the high court on Friday 13th October 2017.
Nakumatt Holdings, which 92.3
Nakumatt also says that its financial advisers are currently developing a financial model and a business plan that will inform how the interests of the affected stakeholders will be managed going forward incase of a possible transaction. Under the terms of the proposed preliminary agreement, Tuskys will play the following role;
- Provide certain management services to Nakumatt, including procurement and inventory management. Tuskys is expected to implement robust governance structures which include the appointment of new independent directors, CEO and CFO.
- Enter into a financial arrangement that will ensure funding is available amongst other things to pay employees and landlords and to ensure Nakumatt continues trading.
- Engage with the Nakumatt’s creditors and ensure suppliers continue restocking the outlets within a guaranteed ringfenced structure with no risk of non payment. Revenue from the sale of such stocks will be paid into separate trust accounts.
On its part, Nakumatt will take aggressive cost cutting measures which include exiting from non performing stores. Atul Shah family will still retain a significant minority stake and continue as investors in the chain.
Court documents reveal that a number of tier one banks in Kenya have a significant exposure in Nakumatt, they include; KCB Group, Diamond Trust Bank, Standard Chartered and Bank of Africa. Other creditors include landlords, suppliers of stock, service providers and the Kenya Revenue Authority all seeking to recover arrears that run into billions.
In November last year, John Harun Mwau, a wealthy and controvesial Kenyan “businessman”, reportedly sold a 7.7% stake he owns in Nakumatt for a sum believed to be in the region of $10 million according to Forbes.