Suppliers of Uchumi reject debt proposal
What you need to know:
- Uchumi Supermarkets #ticker:UCHUM is set to hold a fresh creditors meeting to discuss how the retailer will pay debt after the earlier proposal of liability write-offs was rejected by a section of the suppliers.
- The court, in a September 26 ruling, directed the retailer’s Company Voluntary Arrangement (CVA) supervisor Owen Njenga Koimburi to engage the secured creditors and present a report in 30 days that will outline how they will be paid by Uchumi and the retailer’s overall plan.
- After a creditors meeting in May, it emerged that it was unanimously agreed that suppliers take a 70 percent cut on the struggling retailer’s Sh3.6 billion arrears, a decision that has now been quashed.
Uchumi Supermarkets #ticker:UCHUM is set to hold a fresh creditors meeting to discuss how the retailer will pay debt after the earlier proposal of liability write-offs was rejected by a section of the suppliers.
The court, in a September 26 ruling, directed the retailer’s Company Voluntary Arrangement (CVA) supervisor Owen Njenga Koimburi to engage the secured creditors and present a report in 30 days that will outline how they will be paid by Uchumi and the retailer’s overall plan.
After a creditors meeting in May, it emerged that it was unanimously agreed that suppliers take a 70 percent cut on the struggling retailer’s Sh3.6 billion arrears, a decision that has now been quashed.
Uchumi also received reprieve after the court issued an injunction stopping determination of other cases levelled against the retailer and landlords from kicking them out of premises owing to unpaid rent until the case is determined.
The ruling states that “… a stay be and is hereby granted on all legal proceedings pending before other courts, tribunals and quasi-judicial bodies against Uchumi Supermarkets Plc pending the hearing and determination of this petition or further orders of the court.”
DISTRESS FOR RENT
The order covered all judgments, decrees, orders, execution proceedings inter alia proclamations of attachment, distress for rent, and any other form of execution proceedings against the struggling retailer.
This would stay in place until a determination is arrived at or further orders of the court are issued.
“That an injunction be and is hereby granted against any eviction or the interference of the quiet enjoyment of Uchumi Supermarkets Plc at all and any of the premises it occupies pursuant to a lease, tenancy agreement, license and/or controlled tenancy pending hearing and determination of this petition or further orders of the court.”
BLAMING RETAILERS
Uchumi accuses a section of suppliers of colluding with its employees to fleece the retailer through fictitious claims that contributed to its collapse.
Court papers filed in Uchumi’s fight with one of its suppliers, Smart Brands Ltd, earlier in the year revealed how the fraud was propagated by the retailer’s employees, suppliers and distributors.
