Struggling supermarket chain Tuskys has refused to reveal the identity of the offshore investor seeking to save the retailer in a Ksh2.1 billion debt financing deal, even as creditors raise doubts and questions over the supposed agreement.

Tuskys rejected a creditors’ petition to reveal the identity of the investor – a Private Equity (PE) firm based in the Cayman Islands. Tuskys’ total debts are in excess of Ksh10 billion, with the figure including loans from local banks. The retailer went the PE route after exhausting local credit lines.

Creditors led by home appliances maker Hotpoint Ltd took to Court to petition Tuskys to not only reveal the identity of the investor but also terms of the deal – including whether or not it is secured, interest rate and repayment period. Hotpoint raised serious doubts on the deal’s existence and credibility, noting that it was first announced nine months ago.

“In its numerous affidavits filed herein, the company has made vague references to an investor. This has been the talk for a period of nine months now.

“The company has availed [sic] absolutely no evidence of alleged funding support. It has also not disclosed the financier, the amount expected or the terms of financing. The issue of financing is vague, ambiguous, and totally lacks credibility,” Hotpoint noted in court documents.

Hotpoint is one of 60 creditors in the suit. While refusing to disclose terms of the loan, Tuskys maintained that the investor’s entrance would allow the firm to find its footing again and position itself for acquisition. Reports indicated that the investor offering the Ksh2 billion loan sought to secure it using all of Tusky’s shares – putting shareholder’s stakes at risk in case of default.

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“That as is custom in similar transactions, the applicant is unable to disclose the identity of its investor or specifics surrounding the terms and conditions of the transactional documents before financial closing owing to a non-disclosure agreement.

“A disclosure despite these terms would be in bad faith and would jeopardise the entire transaction,” a reply from Tuskys acting CEO Shadwick Okumu read in part.

More hurdles stand in the way of the deal, including the decision of two Tuskys shareholders to sell their combined stake of 27.5 percent in the chain, unlike other shareholders in the family-owned company who voted to take the Ksh2.1 billion loan.

Tuskys has in court sought to stop the cases seeking its liquidation for a year, arguing that  it could turn things around commercially.

At the same time, however, many of its shelves remain empty and it has been forced to vacate several key spaces it once occupied. Employees continue to leave with some publicly expressing frustrations, and suppliers slug it out in Court seeking their dues.

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