Troubled Tuskys Supermarket owes its creditors Sh19.6 billion, underlining the challenges in reviving a retailer that was Kenya’s largest.
The retailer has disclosed in court papers that its assets can only cover payments of Sh6.67 billion of the debts or 34 percent of the dues owed to unsecured creditors.
This indicates that Tuskys owes the unsecured creditors a total of Sh19.6 billion, which is nearly ten times the Sh2.1 billion the retailer is seeking from a strategic investor for its revival.
The debt disclosure was made in a suit where Tuskys has opposed its liquidation by tens of firms, arguing that its assets are inadequate to settle majority of the creditors’ dues.
“He states that as at June 2020, it was estimated that only Sh6.67 billion, representing 34 percent of the total sum owed to unsecured creditors as a class, would be available for distribution,” court documents quoted Mr Okumu.
“He justifies why liquidation of the company in its current financial state would not offer the creditors (a large portion of whom are unsecured creditors any reprieve whatsoever.”
Tuskys has hinged its recovery on the assets sale worth Sh911 million, the Sh2.1 billion from strategic and restructuring of its debts to ensure staggered payment of the creditors.
Since announcing the Sh2.1 billion deal last year, the retailer has been losing employees, stores, customers and suppliers as its cash troubles worsened.
Tuskys, until recently Kenya’s top retailer with 53 stores, has less than seven outlets operating amid stock-outs. At its peak, the retailer was an acquisition target for global giants seeking a foothold in East Africa such as Walmart.
Poor management, rapid expansion and a vicious fights among family members that own Tuskys hurt the retailer, opening the door for foreign chains such as France’s Carrefour and local rival Naivas to gain market share.
Another once top retailer, Nakumatt, collapsed in a similar fashion.