Uchumi suppliers split as more firms join wind-up case
Uchumi Group CEO Julius Kipng’etich: We had made two proposals to unlock the stalemate. PHOTO | FILE
What you need to know:
WoW Beverages has joined the petition claiming Sh15 million alongside Professional Marketing Services (PMS), Wazaran Limited and Nairobi Flour Mills which want to recover Sh30 million, Sh6 million and Sh3.7 million respectively.
Four more creditors have joined a petition seeking to wind up Uchumi Supermarkets, even as the Association of Kenya Suppliers opposed the suit arguing that the retailer is not yet beyond salvage.
WoW Beverages, which distributes Jack Daniels whiskey in Kenya, has joined the petition claiming Sh15 million alongside Professional Marketing Services (PMS), food supplier Wazaran Limited and Nairobi Flour Mills which want to recover Sh30 million, Sh6 million and Sh3.7 million respectively.
The High Court last month allowed creditors to join the winding up suit filed by import and export firm San Giorgio Limited, since then attracting nine other suppliers who are seeking a total of nearly Sh300 million.
But the Association of Kenya Suppliers has opposed the move, and joined the suit throwing its weight behind the troubled retailer-- which owes its members a total of over Sh3 billion.
“Take notice that Nairobi Flour Mills, creditor for Sh3.7 million, intends to appear at the hearing of the petition to participate in such petition for a winding up order,” the miller says in court filings.
The three firms have joined San Giorgio Ltd, Kenblest Group, Githunguri Dairy, Kappa Oil, Insync Media, Star Times and Nairobi Flour Mills. Nairobi Bottlers Limited, which joined the suit last month, has now dropped out.
The firm’s lawyer Paul Wathuta said on Friday that his client had only joined the suit to follow up on directions issued by the court. He added that Nairobi Bottlers would prefer Uchumi to continue operating.
The Association of Kenya Suppliers holds that the traders seeking to wind Uchumi up have not proven that the retailer is beyond salvation.
It adds that members have worked out a repayment plan with Uchumi, and that the troubled retailer is searching for a strategic investor to get it back on the rails.
Kevian Kenya Limited founder and chairman of the Association of Kenya Suppliers Kimani Rugendo says his firm is owed over Sh100 million but is willing to work out a repayment deal.
Mr Rugendo earlier this month said that many of Uchumi’s large creditors are willing to convert their debts into equity.
His Kevian Kenya Limited already has 275 shares in the troubled retail chain. “It’s not enough for a petitioner to allege that a company has defaulted on a debt. The petitioner has to demonstrate that the only way out is liquidation. The petitioners have not made such an attempt. I and the members of the association have been involved in negotiations and I am aware that Uchumi has put in place a workable plan to ensure all debts are settled,” Mr Rugendo says.
Justice Farah Amin will hear the case on June 17.
The company boss Julius Kipngetich on Friday said that Uchumi had made two proposals to unlock the stalemate.
They had offered the suppliers the option of isolating the debt and converting part of it into shareholding, similar to the deal it has offered to the majority of their creditors, or the option to pay current supplies within 30 days and start repaying the old debt by August.
“We have implored on them one by one but some are bent on going on with the suit. The government will talk to them on Monday or Tuesday to see if they can be persuaded to pull back,” said Mr Kipngetich.
