Troubled e-commerce firm Copia Kenya has stopped servicing orders in six towns barely a week after it was placed under administration on cash flow challenges.
In an internal communication to its staff, the firm said it stopped taking deliveries in Meru, Embu, Kericho, Eldoret, Machakos, and Naivasha effective May 29.
The firm said staff in the affected stations will go on leave, awaiting further instructions.
”We regret that we have to stop serving these locations at this time as we resize and reshape the business and we expect that we will in the future return to these areas,” Anne Mwihaki, Copia director of human resource, told staff.
In a separate email, Makenzi Muthusi, one of the administrators appointed by Copia, assured employees the firm had funds to cover May salaries but delayed the disbursement because they “were unable to complete the administrative tasks relating to the bank accounts.”
Copia board placed it in administration on May 23 as they sought to stabilise it amid recent upheavals.
It hired Mr Muthusi and Julius Ngonga of KPMG to lead the administration process to maintain the company as a going concern.
Company administration is a process whereby an insolvency practitioner is appointed to restructure a business by ensuring it is a going concern with the aim of either turning it into a profitable company or effecting a sale of the business to preserve its value.
Under the watch of the administrator, Copia says it expects its local management team to implement a plan with a lower burn rate, an accelerated path to profitability, and a focus on the increasingly digital consumer.
While Copia Kenya says it will seek to preserve jobs, the fintech notes that some staff would have to be retrenched.
Placing the firm under administration comes barely a few weeks after Copia announced it would send home 1,060 workers in a redundancy plan mainly on liquidity constraints.
The firm’s CEO Tim Steel recently told workers that affected staff would go home after a month in compliance with the labour laws.
Copia was founded in 2013 by former Silicon Valley maestros Tracey Turner and Jonathan Lewis.
Its model comprises digitally enabled, locally-based agents who operate as order and delivery points to meet consumers where they are, online or offline.
