Kenya’s largest retailer Nakumatt holdings has filed for administration order, a legal status to protect itself from the threat of creditors’ actions.
Nakumatt says the primary aim of the order is to rescue the company as a going concern. Over this period, Nakumatt shall continue to trade normally.
High Court Judge Justice Joseph Onguto has ordered that the application for the order to be heard on 8th November 2017.
Under the insolvency laws of a number of common law jurisdictions, administration order is similar to bankruptcy in the United States.
The retailer has been struggling from a massive debt amounting to more than Sh 30 billion.
“The directors of Nakumatt Holdings Limited (“Nakumatt”) have today (30/10/2017) applied to the High Court for an administration order in accordance with section 532(1)(b) of the Insolvency Act (2015) (“Act”).” The company said in a statement.
The firm has proposed that Mr Peter Kahi of PKF Consulting Limited be appointed as an administrator and will perform his functions in the interests of Nakumatt’s creditors.
The company described the order as a way to work with its creditors to get back on solid financial footing and invest in long-term growth in a difficult retail environment.
“The decision to apply for an administration order was a difficult and complex one that was carefully considered by Nakumatt and its advisors. Nakumatt is apprehensive that in the absence of an administration order, there is a significant danger of it being wound up with the inevitable consequence that the company, its employees, lenders, landlords and suppliers would suffer significant losses, with a broader impact on thousands of farmers, small businesses and traders whose livelihoods are dependent on the business.”
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