Tuskys supermarket’s five-storey building in Nairobi’s city centre has been put on auction for the second time by Equity Bank which is seeking to recover a loan of Sh650 million.
The commercial building, which houses the retailer’s largest store and sits at the junction of Tom Mboya Road and Accra Road in Nairobi, will be up for sale once the auctioneer’s hammer falls Tuesday.
The property was first placed up for sale on March 2, 2022.
Its auction comes barely a few months after the retailer unsuccessfully petitioned the court to stop the lender from selling the building, arguing that the building was worth more than what Equity was seeking.
This is the first major auction of properties linked to Tusker Mattresses Limited, the owner of the Tuskys brand, which has so far only lost merchandise to auctioneers for rent default.
The move to auction the building is the latest signal of the retailer’s continuing financial distress and could trigger multiple creditors to seize and forcibly sell its assets estimated at Sh6.67 billion.
Insiders at Antique Auctions, which is driving the sale of the city centre property, linked the auction to an alleged Sh650 million loan that the supermarket operator owes Equity Bank.
“The court gave us a go-ahead to sell Tuskys building along Tom Mboya Street a few months ago and we are looking for a buyer to take it up,” a representative of Antique Auctions told the Business Daily on Monday.
“They were not opposed to the sale of the building when they went to court in March to stop Equity from selling it. The bone of contention was on the amount of sale which we have now agreed to be Sh700 million.”
The sale of the property will see Tuskys Imara supermarket closed unless the new owner chooses to retain the retailer as a tenant.
During the sale, a deposit of 25 percent of the total amount must be paid at the fall of the hammer or immediately after the acceptance of the bid in cash or a banker’s cheques and balance paid in 90 days to Equity Bank.
The buyer must also pay a refundable deposit payable to Antique Auctions Agencies prior to the auction date by banker’s cheques only.
“The sale of the properties is subject to the reserve prices. The auctioneer has a right to reject a bid without giving any reason whatsoever,” said the auctioneer in a public notice Monday.
Tuskys has hinged its recovery on the assets sale, and restructuring of its debts to ensure staggered payment to creditors owed nearly Sh20 billion.
But the retailer has rejected the creditors’ petition in court to reveal the identity of the fund based in the Cayman Islands tax haven amid doubts over the existence of the deal.
Since announcing the Sh2.1 billion deal last year, the retailer has been losing employees, stores, customers and suppliers as its cash troubles worsen.
The retailer disclosed in court papers that its assets can only cover payments of Sh6.67 billion of the debts or 34 percent of the dues owed to unsecured creditors.
