Landlords want Nakumatt out
Goods belonging to Nakumatt Lifestyle branch are scattered at its head office in Nairobi on April 1, 2018, following the retain chain's eviction from Hazina Trading Centre. PHOTO | EVANS HABIL | NATION MEDIA GROUP
What you need to know:
- Tuskys Supermarket, which initially wanted to help Nakumatt in its recovery, suspended the partnership last week.
- Nakumatt has closed down some of its stores while some landlords have tried to evict it from their premises.
Nakumatt Holdings Ltd has suffered yet another blow after 14 landlords said they do not wish the supermarket chain to be their tenant.
The owners of Galleria, Nyali, Likoni, Karen Crossroads, Nakuru, Eldoret Household, Cinemax, Nanyuki, Highridge, City Hall, Diani, Malindi, Meru and Highport premises also rejected the proposals for recovery advanced by Nakumatt’s administrator Peter Obondo Kahi.
The High Court in January appointed Mr Kahi to oversee the recovery of Nakumatt Holdings Ltd.
After his appointment, some key branches of the supermarket, including the Mega, Nakumatt Prestige, Galleria, Lavington, Ukay, Ridgeways, Nakuru and Village Market started restocking, rekindling hopes for revival.
RENEW LEASE
But in the statement issued on Sunday, the landlords said the supermarket’s lease with two other landlords would be expiring soon, and that the two have no interest in renewing it.
“Five more landlords have sued Nakumatt, leaving nine premises which may possibly wish to continue having the supermarket as a tenant,” the landlords said.
The landlords include Norkun Investments, Galleria Ideal Locations, Nyali, Nova Holdings, Nellea, Karen Crossroads, CK Patel, Nanyuki Mall, and Kenindia Assurance.
They said they reached the decision after consultations.
“The Nakumatt/Tusky’s deal has collapsed with no viable alternative offered, leaving us with no other conclusion than that Nakumatt will not recover,” the landlords said.
PARTNERSHIP
Tuskys Supermarket, which initially wanted to help Nakumatt in its recovery, suspended the partnership last week.
Tuskys was to provide Sh650 million to support Nakumatt’s operations and another Sh4.5 billion for restocking.
The former, through its lawyers however, wrote to the Competition Authority of Kenya on April 2, saying it was reconsidering its interest in the deal as it did not agree with some proposals Mr Kahi presented to creditors in March.
“Our client has raised concerns over certain proposals on restructuring of the company,” Mr Godwin Wangond’u, the Tuskys lawyer, said in the letter to the authority.
“We are instructed to advise you that our client is reconsidering the proposed investment in Nakumatt.”
SHUTDOWN
Nakumatt is struggling to pay a Sh35.8 billion debt.
It has closed down some of its stores while some landlords have tried to evict it from their premises.
“Most landlords developed their properties on borrowed funds and we stand at risk of having them seized by banks following Nakumatt’s massive default,” the 14 said.
“Due to Nakumatt’s failure to adequately stock its shelves, footfall in our properties has fallen drastically, affecting other tenants and leading to significant losses.
"There is a risk of loan defaults and job losses being visited on these and other third parties.”
LOOTERS
Other supermarket chains have already replaced Nakumatt in some of the stores initially occupied by the once retail giant.
A week ago, an auctioneer reportedly hired by Hazina Trading Centre, raided Nakumatt Lifestyle branch, took items from shelves, loaded them on trucks and dumped them outside the retailer’s headquarters in Nairobi, giving looters an opportunity to cart them away.
Nakumatt CEO Atul Shah said property valued at Sh200 million could not be accounted for.
