Court To Decide on Nakumatt Liquidation on January 17

The court will on January 17 decide on the Nakumatt liquidation plan, which its creditors voted unanimously to dissolve on Tuesday, after several efforts to revive the supermarket chain failed, marking the formal end of the once giant retailer in East Africa.

About 92% of creditors among them banks, suppliers and landlords  backed the liquidation plan which was presented by Peter Kahi, the court appointed administrator of the troubled retail chain, in the creditors’ only meeting on Tuesday.

Nakumatt expanded from a mattress shop in a rural town to a network of more than 60 branches before cash crunch forced it to shut more than a dozen outlets in 2017 when it was unable to pay suppliers, landlords and other creditors.

“An attempted turnaround of the business would be very costly and company is likely to be lossmaking for the better part of the turnaround window, implying that such a turnaround would need to be financed by additional debt to sustain operations before achieving breakeven,” Mr Kahi said last week.

Nakumatt owes more than 30 billion, 18 billion to suppliers, 4 billion to commercial paper holders and the rest to banks.

Poor management, rapid expansion and militant attack at two separate stores all hurt the chain, opening doors for foreign chains such as Carrefour and Shoprite to enter the market.