Before Corona Virus pandemic set in to sweep businesses under its wing, the poor business curse was already eating away at the once popular outlet, Uchumi.
The retailer that was well known for its affordability and great Christmas deals has been shackled in financial woes running into billions of shillings. In a recent last nail to its head, the court has ordered Uchumi Supermarkets ltd to pay 4.7 Billion shillings owed to over 100 suppliers in 6 months or risk auctioning and subsequent eviction by their landlords.
Presiding over an insolvency case against Uchumi as tabled at the High Court, Justice Kasango allowed implementation of the CVA (Company Voluntary Arrangement) on condition that Uchumi pays all its debts within six months, and in turn, all money claims currently before court be suspended.
Under the CVA, Uchumi’s creditors including UBA will shoulder a 70% loss on amounts owed to them. Consequently, the Court requires the retailer to put up a committee to ensure that debts are paid on time.
“In the event the company defaults, the company’s landlords may exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company only with consent of the Supervisor or with the approval of this Honorable court,” read a part of the Court documents.
The creditors are destined to receive 30% of the amounts owed by the retailer. The outlet had largely pegged its revival plan on a 20- acre piece of land in Roysambu. However, the said piece of land was apparently by KDF saying it had been compulsorily acquired in 1985 for a military base.
The future of the outlet seems very Gray. Covid 19 seems to be the coffin that will send the brand to its final resting place.
