Govt seeks banks’ help to rescue Nakumatt

The government has today initiated mediation talks that could see banks help in restructuring troubled supermarket chain, Nakumatt, which is staring at liquidation.

Trade Permanent Secretary Chris Kiptoo met with representatives of eight banks in a move that could lift the company out of debt.

The meeting came in the wake of a second petition seeking to have Nakumatt Holdings Ltd declared insolvent for failing to pay over Sh60 million under an agreement reached with Gold Crown Beverages, for supply of tea leaves.

The company manufactures Kericho Gold, London Fruit and Herb and Baraka Chai tea leaves brands and it says its efforts to have the debt paid have been fruitless.

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A company that supplied baby diapers, African Cotton  Industries, is also in court over a Sh70 million debt.

Nakumatt, which has been downsizing in recent months, also owes various landlords and suppliers millions of shillings.

While the government is keen to rescue the supermarket chain from going under, it has ruled out a bail out.

Most lenders have shunned the company.