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Bread and milk firms push to wind up Uchumi over Ksh215m debt

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Thika-based miller Kenblest Group and Githunguri Dairy, which processes Fresha milk, are among three creditors seeking to join a petition to wind up Uchumi Supermarkets, bringing the total claims in the suit to Sh215 million.

The two suppliers and software developer Insync Solutions have filed an application in the High Court, seeking to be allowed to join the petition to liquidate Uchumi, which currently owes its suppliers over Sh3.6 billion.



Kenblest Group plans to enter the suit through two of its firms, bread maker Kenblest Limited and its wheat flour arm, Mcneel Millers. Mcneel wants Sh52.7 million recovered, while its sister company is demanding Sh6.1 million.

Githunguri Dairy Farmers Co-operative Society’s demand is the highest in the suit. It seeks to have Sh99 million recovered from the liquidation of Uchumi. Insync claims it is owed Sh4.2 million.

“Take notice that Githunguri Dairy Farmers Co-operative Society, a creditor for Sh99,001,088 intends to appear on the hearing of the petition to support it,” Fresha’s application reads.

The High Court has opened the door for Uchumi’s creditors to join the case to either support or oppose the winding-up petition.

Uchumi’s total liabilities have surpassed its assets by nearly Sh200 million, putting the firm in a negative equity position.

The retailer’s debt load of Sh6.3 billion against a total asset base of Sh6.1 billion has crystallised into a negative equity of Sh181.8 million, or Sh0.49 per share as per half-year financial statements to December.

The petition was filed by San Giorgio Limited, which claims the troubled retailer has refused to pay Sh53 million for counters, trolleys, baking and refrigeration equipment it supplied between 2011 and 2015. The firms say months of negotiations with Uchumi have not led to any deal over repayment.

Uchumi, in its response, challenged San Giorgio’s debt, and has asked the court to dismiss the petition.

But San Giorgio says Uchumi acknowledged receipt of several invoices that it is yet to settle. The firm’s operations manager, Mr Zachary Onsongo,  adds that Uchumi’s admission to massive financial difficulty and inadequate working capital are adequate grounds for liquidating the retailer.




“It would be against public interest to allow Uchumi to continue trading and accumulating insurmountable debts when it is incapable of paying its suppliers. If Uchumi continues to trade it will cripple other businesses, which supply stock and which have ongoing overheads and financial obligations that are dependent on Uchumi paying for goods and services received,” Mr Onsongo says.

San Giorgio wants the High Court to appoint a provisional liquidator to commence the process of selling off Uchumi’s assets to pay off its debts.

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