Nakumatt Supermarkets has shut down its prime Village Market store a day after 14 landlords demanded it exits their premises over rent arrears running into millions of shillings.
The 14 landlords for Galleria, Nyali, Likoni, Karen Crossroads, Nakuru, Eldoret Household, Cinemax, Nanyuki, Highridge, City Hall, Diani, Malindi, Meru and Highport (Warehouses) said in a joint statement they do not wish to continue with Nakumatt as a tenant and do not support the proposals for recovery advanced by the administrator, Mr Peter Kahi.
Their change of posture, they said, was informed by Tuskys’ decision to pull out of the merger plan with Nakumatt.
Tuskys Supermarket, which had entered into an agreement with cash-strapped retail chain, wrote to the Competitions Authority of Kenya (CAK) expressing its intention to bolt out of the partnership.
Tuskys said the decision was informed by rising concern over some of the proposals Nakumatt’s court-appointed administrator had presented to the creditors at a meeting in March.
“Our client has raised concerns over certain proposals by the Administrator of Nakumatt Holdings Limited on the restructuring of the company.
As a result we are instructed to advise you that our client is re-considering its proposed investment in NHL [Nakumatt Holdings Limited] which was to be preceded by a Management Services and Loan Agreement now under consideration for exemption by the Authority,” Tuskys said in the March 28 letter sent to the CAK by Godwin Wangond’u of Mboya, Wangond’u and Waiyaki Advocates.
Under the proposed deal with Nakumatt, Tuskys was to provide Ksh650 million to support Nakumatt’s operations and an additional sum of between Ksh 1.5 billion and Ksh 3 billion for restocking the stores. Tuskys would charge a management fee of one per cent of sales in addition to offering suppliers guarantees.
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Nakumatt has closed or been pushed out of all but 17 branches, most of them in prime locations, but Kahi had recently announced plans to open six more as part of his turnaround strategy.
The shut stores include Nyali branch in Mombasa, Lunga Lunga in Industrial Area, Nairobi, NextGen (Mombasa Road), Thika Road Mall (Thika Road) and Westgate in Westlands, Nairobi.
