The High Court appointed administrator to oversee the recovery efforts at Nakumatt Holdings has officially taken over the management of the regional retailer today.
Peter Obondo Kahi, an Independent Administrator appointed on Monday following a court ruling, will provide strategic leadership geared at placing the retailer on a recovery path.
In compliance with the court order, the Administrator’s primary objective for the administration will be to explore business recovery avenues for Nakumatt Holdings as a going concern. This is aimed at achieving a better result for the Company’s creditors which would have been impossible had the company been wound up.
Speaking during a handover ceremony following a board meeting at Nakumatt headquarters, Mr Kahi said he will hit the ground running and has lined up a consultative initial suppliers meeting on 31st January to chart the way forward.
In the interim, Kahi appealed to shoppers to consider the restocked Nakumatt branches in their next shopping outing while promising to accelerate ongoing business recovery efforts on all fronts.
“As I take over the management function, I am confident that the elephant is regaining the energy and will soon be in good health with the support of loyal shoppers, dedicated staff, committed suppliers and other partners,” Kahi said.
“At the initial suppliers meeting on Wednesday next week, we shall provide a platform to engage with all suppliers to reaffirm the ongoing restocking process. The restocking process remains crucial to the business recovery,” he added.
Nakumatt Holdings Managing Director Atul Shah confirmed the hand over to Mr Kahi, noting that the administration orders will serve to accelerate and complement ongoing recovery efforts that have already seen the restocking of 8 key branches in partnership with key suppliers.
Key branches already restocked and beginning to enjoy better footfall include Nakumatt Mega, Nakumatt Prestige, Nakumatt Galleria, Nakumatt Lavington, Nakumatt Ukay, Nakumatt Ridgeways, Nakumatt Nakuru and Nakumatt Village.
“As earlier confirmed, the Directors of Nakumatt Holdings welcome the appointment of the Administrator, as it’s in the best interest of this business,” Shah said. “I am confident that the entry of an Administrator provides the best recovery option for all stakeholders. The Administration will allow the business to accelerate ongoing recovery efforts particularly branch restocking and related efforts that are currently underway,” he said.
The administration order in relation to Nakumatt will enable the firm achieve a better outcome for its creditors as a whole than would likely be the case if the company were to be liquidated.
Principally, the administration will enable Nakumatt to be maintained as a going concern. Nakumatt shall continue to trade and generate revenue to meet its ongoing financial obligations.
In addition, the administration and continued trading of the company will provide an opportunity for the business to reassess its financial position and options for restructuring and the time to implement a business turnaround.
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But even more importantly, pursuant to section 560 of the Insolvency Act 2015, while a company is under administration, there is a moratorium on certain legal processes, including a moratorium against enforcement of security over the company’s property or the exercise of a right of forfeiture by peaceable re-entry, without the consent of the administrator or the approval of the Court.
Last year, Nakumatt management had expressed apprehension that in the absence of an administration order, there would have been a significant danger of the firm being wound up with, its employees, lenders, landlords and suppliers standing to suffer significant losses, with a broader impact on thousands of farmers, small businesses and traders whose livelihoods are dependent on the business.
Notwithstanding the current state of the business operations, Nakumatt still believes that it has a strong underlying sustainable core business that is capable of a turnaround with the support of all stakeholders.
Nakumatt considers that administration provides it with the best opportunity to effectively restructure its business.
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