Uchumi opens out-of-court talks with creditors

Troubled Uchumi Supermarkets has opened out-of-court talks with creditors who are seeking to wind up the retailer over pending debts.

The supermarket chain has presented a repayment proposal to organisations that want the High Court to declare the retailer insolvent in a bid to have the liquidation suit dropped.

Justice Farah Amin on Friday granted import and export company San Giorgio, Githunguri Dairy Farmers Co-operative Society and Colgate Palmolive two weeks to consider Uchumi Supermarkets’ proposed repayment plan and decide whether or not to drop the liquidation suit.

The three organisations confirmed in court that they have been in talks with Uchumi Supermarkets and have been furnished with the proposal but are yet to go through it in detail.

“The matter will be mentioned on August 12. Parties are to confirm settlement,” the judge said.

Details of Uchumi Supermarkets’ proposal were however not presented in court. Only the three organisations are left in the petition which had attracted over 10 creditors in May.

Uchumi Supermarkets’ total liabilities have surpassed its assets by nearly Sh200 million, putting the company in a negative equity position.

The retailer’s debt load of Sh6.3 billion against a total asset base of Sh6.1 billion has resulted in a negative equity of Sh181.8 million, or Sh0.49 per share as per half-year financial statements to December.

San Giorgio is claiming Sh53 million from the retailer, while Githunguri Dairy Farmers Co-operative Society is demanding Sh99 million for milk supplies.

The retailer has since the filing of the suit managed to strike a deal with other creditors under the Association of Kenya Suppliers that has seen them drop their support of the petition.