Tuskys’ Ksh20B Debt: End of The Road as Court Orders Liquidation

The High Court has ordered the liquidation of Tuskys Supermarkets, a win for the 60 creditors owed close to Ksh20 billion that have for the past three years been in court seeking the supermarket chain’s liquidation.

Justice David Majanja noted that nothing had been done to revive Tuskys for the three years the liquidation petition led by appliance maker Hotpoint Ltd has been in court. A Ksh2.1 billion debt financing deal announced by Tuskys in 2020 failed to materialize, with the supermarket’s creditors questioning the deal’s existence and credibility.

According to Tuskys, the mystery investor was a Private Equity (PE) firm based in the Cayman Islands.

In his ruling, Majanja noted that Tuskys had not disputed any of its debts worth Ksh19.7 billion. He ordered for the chain’s liquidation to allow creditors to recover what they could.

The chain’s branch network has shrunk significantly over the past five years, from over 60 to less than 7 outlets. Once Kenya’s largest supermarket chain, the fallen retail giant has been vacating several spaces it once occupied as it struggles under the weight of debts to suppliers, lenders and landlords.

What remains of its supermarkets  feature empty shelves, with only a few essential items available.

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The company’s debt includes loans from local banks. Equity Bank in February was looking to auction Tuskys Imara outlet in the Nairobi CBD to recover a Ksh650 million debt. The busy five-storey commercial property is the biggest store in the Tuskys portfolio. Equity’s asking price was Ksh650 million.

Tuskys had explored other options to stay afloat, including a bid to franchise in 2021 that ultimately failed to take off

The move would have seen independent retailers pay Tuskys a fee to trade using their brand name. The Competition Authority of Kenya (CAK) disclosed that Tuskys had sought guidance on the regulatory requirements for franchising in Kenya.

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