UBA Bank has dropped its bid to auction Uchumi’s Supermarket land on Langata Road over a Sh172 million debt.
This is after it emerged that the government was in the process of compulsorily acquiring the land and the lender would first be paid, after the sale, as it holds the title to the property as security.
The bank had moved back to court accusing the collapsed retail chain’s supervisor of failing to call a creditors meeting as directed by the court in June 2020 and the further delay in repayment of the debt, was a concern to UBA bank.
But the bank later said it was no longer interested in pursuing the sale or taking possession of the land, following the new developments.
“The application dated 7/4/2021 by UBA bank Kenya Ltd is dismissed in its entirety with no order as to costs,” judge Alfred Mabeya said in a ruling.
Uchumi had admitted delaying in calling a creditors’ meeting but said it was reconciling claims before making any payments. The court heard that the delay was caused by logistical challenges occasioned by the Ministry of Health protocols to contain the spread of the Covid-19 pandemic.
The High Court put a stop to all planned sale and pending debt recovery cases, outstanding loans and rent claims against Uchumi, in favour of a Company Voluntary Agreement (CVA)
Before the cases were put on hold, Uchumi revealed that it was fighting a record 45 legal suits. The cases were pending before magistrate’s courts, the High Court and tribunals, all accusing the troubled chain of its inability to pay debts.
The collapsed retailer suffered a blow after the judge ordered it to vacate its former branch at Adam’s Arcade and two other premises, which it has sublet to other tenants.
Justice Mabeya said the company should vacate the Adam’s Arcade premises within one month and pave the way for the landlord - Kenya Bowling Centers Ltd- to take over the building.
The judge also directed United Housing Estate Ltd to re-enter two different shops in a different branch after its owner Zahid Kanji complained that the former retail giant owed it Sh26.3 million and has defaulted, breaching the CVA.
