A Nakumatt supermarket store. [Photo/Nation]
Suppliers who are owed billions of shillings by Nakumatt could be owning a piece of the ailing retailer soon if they agree to a debt-for-equity swap deal.
This proposal was brought forward by the retail chain’s newly appointed independent administrator Peter Kahi when he met the suppliers in Nairobi yesterday.
Mr Kahi said that from now onward he would make a raft of proposals to the suppliers and other firms owed money by Nakumatt so as to help the retailer grow.
“We will present various scenarios of how we want the company to move forward and this will include conversion of debt to equity by the creditors. It will be upon them to vote for what they want,” said Kahi.
“The proposals will be clear in terms of the direction that the company will take and will need approval by at least 75 per cent of the creditors by value.”
According to Kahi, a formal proposal would be made after a deep look into the retailer’s books as well as all the claims lodged by creditors. The administrator is taking a path taken by fellow struggling retailer Uchumi.
Suppliers to the State-owned retailer did not accept the proposal. National carrier Kenya Airways however recently succeeded, convincing creditors, the bulk of who were local lenders, to convert their debt into equity.
The restructuring was concluded last year, with the banks emerging as the second largest shareholders in the airline (38 per cent).
Kahi also said Nakumatt was in the meantime putting into place short-term measures which should increase sales to its outlets. This involves restocking mostly fast-moving consumer goods such as groceries. The suppliers, he said, would be paid between seven and 14 days.