The High Court has allowed Equity bank to auction Tuskys’ five-storey building in Nairobi’s central business district over a Ksh650 million debt that the retailer has been unable to pay.
The building along Tom Mboya Street houses Tuskys Imara, one of the remaining six branches of the struggling retailer, which is sinking in debt.
The lender is now at liberty to auction the retailer, further complicating the matter for Tuskys which has kept hopes alive for a comeback.
In a ruling, Justice David Majanja said that Equity is a secured creditor and entitled to recover its money, consequently dismissing Tuskys’ petition to stop the auction.
“Since the company (Tuskys) only seeks an injunction pending the determination of the application, the orders cannot be granted. This would mean that the bank would be prevented from exercising its legal right for no reason other than pending insolvency proceedings, to which it is not subject,” the Judge said.
Equity told the court that it will give back the surplus once it has recovered its debt, which dates back to 2014.
Once Kenya’s biggest retail chain, Tuskys has seen its branch network shrink from over 60 to less than 10 at the moment. It continues to battle suits from creditors and disputes with landlords over non-payment of rent.
Tuskys’ total debts are in excess of Ksh10 billion, with the figure including loans from local banks. Equity Bank is looking to auction the property to recover a Ksh650 million debt.
The fallen retail giant has in the past year been vacating several spaces it once occupied as it struggles under the weight of debt to suppliers, lenders and landlords. Naivas, Carrefour and Quickmart have been the supermarkets taking over many of the vacated spaces.
