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Uchumi begins to vet creditors

Uchumi Supermarkets has opened an online portal for trade and services creditors to register their debts as part of the retailer’s implementation of the Company Voluntary Agreement (CVA). 

Registration of debt incurred before March 2, 2020, through the online portal will allow the retailer to verify and audit it.

“The CVA which was approved by the High Court directs that we verify all old debts through a transparent and sustainable process and we are asking all suppliers to register their debts within the next three weeks,” said Uchumi Supermarkets Chief Executive Mohamed Mohamed.

The exact amount of supplier debt will be known once the verification process is completed.

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The CVA, the retailer’s blueprint for the return to profitability, provides a proposed review of the restructuring of the current debt as well as the strategic overview of the business operations of the retail chain that has been undertaken by the board, management of Uchumi and other experienced consultants, including Owen Koimburi.

Earlier this year, creditors including banks, suppliers and shareholders agreed on the CVA that will see them take a 30 per cent haircut and get repaid in parts within six years.

Aside from the haircut, 40 per cent of the debt owed to unsecured creditors will be converted to non-cumulative convertible preferred shares.

The fallen retail giant has also intensified efforts to find a strategic investor who might inject capital into the business and also seeks to optimise performance through a new business model.

Uchumi is seeking to dispose of some of its assets including a piece of land estimated to raise Sh2.8 billion that might help clear some debts.

The CVA will, however, be subject to a periodic review through a creditors meeting every six months where the creditors and other stakeholders will appraise the implementation of the CVA and the financial soundness of the retailer.? 

Read the Original Article on The Standard