Retail stores Tuskys and Nakumatt have sought to have their proposed management and financial deal spared from anti-competitive regulations.
In a Gazette Notice published on Friday, the Competition Authority of Kenya (CAK) announced that it had received the proposed Management Services and Loan Agreement from the outlets that are aimed at getting Nakumatt a relief off its debts.
“Pursuant to provisions of section 25 (3) of the Competition Act, the Competition Authority of Kenya wishes to notify the public that Nakumatt Holdings Limited and Tusker Mattresses Limited (Tuskys) have made an application under section 25 of the Act for the exemption of their proposed Management Services and Loan Agreement for a period of three years,” reads the Gazette Notice.
Tuskys plans to inject up to Ksh 3 billion into Nakumatt, Ksh 650 million of which shall be set aside as an emergency fund while the rest will go into recurring payment guarantees for the retailer’s outstanding debts. Tuskys, in the agreement with the rival retailer, will also provide management services to Nakumatt such as overseeing procurement processes and inventory management.
“Tuskys shall provide recurring payment guarantees to the suppliers of the target to ensure the suppliers supply stocks to Nakumatt’s outlets,” states the notice issued by CAK Director-General Wang’ombe Kariuki.
The notice offered a 30-day grace period to those opposed to the plan to register complaints with the authority.
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“All interested parties must, within thirty days of the publication of this notice, submit any written representations which they wish to make in regard to this application.”
CAK had initially rejected the merger plan for the two citing the use of clause on anti-trust law that it termed as a wrong application ground. This notice with and the said application means CAK will not consider whether the said agreement will hurt those who rival the two retailers.
The waiver, however, comes at a time when a court-appointed administrator, Peter Kahi, has taken over the management of the troubled Nakumatt and it is not clear how the proposed management deal will impact on the changed atmosphere.
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