More than 50 companies, including the Kenyatta family’s Brookside Dairy, have joined a High Court petition seeking to wind up troubled retail chain Nakumatt.
The firms had met the Monday deadline set for creditors to join Africa Cotton Industries’ petition seeking to declare Nakumatt insolvent.
Another 19 firms that are pursuing Nakumatt for settlement of their debt did not state whether they support the insolvency petition or not.
Brookside, which is seeking settlement of a Sh457 million debt, has filed its papers in support of the winding up petition.
“Take notice that Brookside Dairy Limited, a creditor of the above mentioned company for Sh457,525,622.24 as at September 13, 2017 intends to appear at the hearing of the petition and to support such petition,” Brookside says in a notice to enter appearance filed in court.
Only one firm — alcohol beverages manufacturer Seven Days International Limited — opposed the bid to find Nakumatt bankrupt.
Seven Days says in court filings that Nakumatt should “be given time to reconstruct to enable it to pay its creditors”.
Debt could be higher
Court papers show that the troubled retail chain owes the petitioners Sh2.4 billion, but other invoices attached to the court filings from firms that were yet to join the petition by Monday pushed the amount to over Sh3.1 billion.
Justice Louis Onguto was to hear a mention of the petition on Monday, but was forced to adjourn it to September 29, due to health reasons.
The judge had earlier issued a temporary order barring any creditor from attaching Nakumatt’s property until the insolvency petition is heard and determined.
Brookside, which is Kenya’s largest dairy processor has a Sh457 million claim against Nakumatt, the highest in the list of suppliers and has joined the petition seeking to declare the retailer insolvent.
The list of top creditors includes furniture distributor Redstar International (Sh261 million), Kisima Management Limited (Sh201 million), dairy processor New KCC (Sh290 million), Kenindia Insurance (Sh167.2 million) and Nexus Holdings Limited (Sh103 million).
Outstand Logistics Limited (Sh415 million), Norkan Investments, which owns the Galleria Shopping Mall in Langata, (Sh338 million), and the Retirement Benefits Authority (Sh139 million in Nakumatt employees’ pension contributions) also make the list of creditors, who were yet to join the petition by Monday’s deadline but are owed large sums of money.
Yet to disclose
Only two banks — NIC #ticker:NIC and GTB — have joined the insolvency petition. NIC is claiming Sh42 million, while GTB is yet to disclose the amount owed.
Prominent Nakumatt creditors that have yet to disclose the amounts they are owed include Text Book Centre, Kartasi Industries, Nivea, Bobmil, Kim-Fay and WOW Beverages.
Nakumatt’s landlords, including Sabaki River Holdings, that hosts the retail chain at Malindi’s Oasis Mall (Sh20.1 million), High Park Investments in Highridge (Sh8.8 million) and South Coast Holdings in Diani (Sh6.6 million), have also joined the list of creditors seeking the retailer’s insolvency.
The list of landlords with huge rent arrears but who were yet to join the petition on Monday includes Thika Road Mall (Sh51 million), Kental Enterprises which owns Westlands-based Ukay Centre (Sh61 million) and Ridgeways Mall (Sh32 million).
Kental Enterprises, in a letter to Nakumatt dated April 10, 2017, claimed that the struggling retailer had earlier this year issued cheques totaling Sh25.7 million that bounced.
The bounced cheques were intended to cover rent arrears for September, October and November 2016.
Tea processor Gold Crown Beverages, which had filed a separate insolvency petition over a Sh60 million debt, has also joined the Africa Cotton Industries suit.
The creditors’ decision to join the petition came as Nakumatt shut down its TRM branch, citing stock taking for the closure. TRM chief operating officer Bashir Dalvi, however, said they were in talks with Nakumatt to have them exit the space due to mounting rent arrears.
French retailer Carrefour and Naivas have emerged as possible frontrunners to take up the TRM space, even as Nakumatt announced that it had opened negotiations with Tuskys for a possible merger.
Nakumatt, which is Kenya’s largest retail chain by number of outlets and Tuskys, the second largest, are yet to make public financial details of the proposed merger that was announced yesterday.
The Competition Authority of Kenya said it was not aware of the said merger, leaving Nakumatt boss Atul Shah’s revelation of a merger in limbo.
READ: EDITORIAL: Nakumatt, Tuskys deal must follow due process