Uchumi Supermarkets has struck a deal with its landlord over rent arrears to save its assets from being auctioned. The retail chain’a management, while denying its head office faces imminent attachment by the Kenya National Trading Corporation (KNTC), said it has a payment plan with the landlord for rent obligations.
In a statement issued after BusinessToday reported that the retail chain’s head office assets could be auctioned over Ksh59 million debt, acting CEO Mohamed Mohamed said the pay is, however, subject to capital injection through various sources that the management is actively pursuing.
The report has ruffled feathers in management and board ahead of the company’s annual general meeting scheduled for tomorrow, where the key issue of financing will be top on the agenda.
Mr Mohamed acknowledged that Uchumi indeed owed KNTC rental arrears but did not reveal how much the debt is. “Further to this, Uchumi has not received any auctioning proclamation from KNTC,” he added.
RELATED: Uchumi owes landlord Ksh59 million in rent arrears
Mr Mohamed said Uchumi remains committed to engaging existing creditors with view to bolstering its financial and operational performance. Sources had indicated that the Ksh59 million debt had accumulated over the last two years as the retailer struggled with meeting its financial obligations due to cashflow issues.
KNTC, which is owned by the government, was said to have issued Uchumi management with notice of auctioning its assets and even retained an auctioneering company to execute the matter.
Uchumi has rented godowns from KNTC in industrial Area, Nairobi, which also house its head offices. The godowns are used to hold stocks and other merchandise before distribution to the branches.
The auctioneers are likely to confiscate stocks and lock its head office from operations.
This comes two weeks after it was reported that a supplier threatened to auction the supermarket’s assets over a Ksh67 million debt. Euromart Limited secured a court order to auction the goods to recover the debt incurred five years ago.
In a letter dated December 3, 2017, the Uchumi head office in Industrial Area and Ngong Road branch were issued the court order and attachment records obtained by the auctioneers. Euromart director Joseph Kirui says they supplied a range of goods including fridges, trolleys and shelves.
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