Uchumi has invited its creditors and shareholders to a meeting at the Bomas of Kenya on 13th May 2019. In its first gathering with the creditors, the retailer aims to table a debt restructure proposal that will see the suppliers recover only 30 percent of the debt owed to them.
The retail chain owes more than 40 companies close to KSh3.6 billion collectively. In the last quarter of 2018, some of the creditors went to court seeking to sell Uchumi assets in order to recover their money. However, the retailer obtained court orders suspending such hearings.
In March, Uchumi unveiled a recovery plan dubbed ‘Company Voluntary Arrangement’. In the plan, Uchumi’s suppliers are expected to forfeit up to 70 per cent of the debt owed to them; equivalent to KSh2.5 billion, or lose the whole amount.
The company presented the proposal in court saying, “The directors have indicated that it is only under the CVA where creditors will expect to recover a portion of their debts. If the proposal is rejected by the company’s creditors, the likely effect is that the company will enter into liquidation.”
The retail chain appointed Owen Koimburi, an insolvency expert with over 20 years of experience in financial management to help in the implementation of the proposed Voluntary Arrangement.
Uchumi creditors are expected to consider and approve the firm’s proposal during the meeting in May. The creditors will be allowed to make changes to the proposal as they deem fit.
