Two Tuskys shareholders snub Sh2bn debt deal, seek stake sale

Two minority shareholders of Tuskys are seeking to sell their combined stake of 27.5 percent in the retailer, taking a different path from that of their siblings who Tuesday voted to obtain a Sh2.1 billion loan to rescue the company.

Orakam Holdings — the investment vehicle which fully owns Tuskys — said a majority of its shareholders approved the raising of the debt from an offshore fund.

The debt will be secured by shares of its investors controlling an aggregate stake of 72.5 percent, putting the shares at risk in the event of default.

But Yusuf Mugweru, who owns a 17.5 per cent stake in Tuskys, and his sibling — controlling 10 percent of the retailer — want to sell their shares to the offshore fund or any other investor. 

Two minority shareholders of Tuskys are seeking to sell their combined stake of 27.5 percent in the retailer, taking a different path from that of their siblings who yesterday voted to obtain a Sh2.1 billion loan to rescue the company.

Orakam Holdings — the investment vehicle which fully owns Tuskys — said a majority of its shareholders approved the raising of the debt from an offshore fund.

The debt will be secured by shares of its investors controlling an aggregate stake of 72.5 percent, putting the shares at risk in the event of default.

But Yusuf Mugweru, who owns a 17.5 per cent stake in Tuskys, and his sibling — controlling 10 percent of the retailer — want to sell their shares to the offshore fund or any other investor.

They opted out of the court-backed shareholder meeting, but didn’t oppose its agenda.

“Yusuf and another shareholder did not oppose or support the agenda of the meeting,” Mr Mugweru’s lawyer, Philip Murgor, said.

“They will seek a different solution of either selling their stake to the offshore fund or any other interested buyer.”

If successful, their exit will leave their siblings to go ahead with the company’s rescue bid in a journey that will rope in debt and equity investors.

Mr Mugweru, Stephen Mukuha, Sammy Gatei, and George Gachwe each own a 17.5 percent stake in Orakam. John Kago, Mary Njoki and Kenneth Njeri each hold a 10 percent stake in the company.

“The majority of shareholders present at the meeting have unanimously approved the progression of ongoing efforts to formally secure structured credit facilities amounting to Sh2 billion necessary to provide operating capital in the short to medium term,” Orakam’s chairman, Mr Kago, said in a statement.

“The shareholders reiterated their commitment to providing the necessary cooperation and support to ensure a speedy conclusion of the ongoing international capital sourcing effort which is currently at a tail end-stage with a positive response from an equity investor.”

They also voted to approve equity capital injection at a later stage.

Mr Kago said the extraordinary general meeting was a significant step towards the signing of the loan agreement with the unnamed lender said to be registered in the Cayman Islands.

The statement did not mention the shareholders who voted in favour of the resolutions or those who abstained.

The move by Mr Mugweru and his unnamed sibling signals their intention to cut their risk in the company that has been on survival mode for months now.

Mr Mugweru, who has been feuding with his siblings whom he has accused of embezzling the company’s funds, had initially planned to scuttle the meeting before changing tune to focus on exiting the retailer.