The government, in its capacity as the major stakeholder in the affairs of the collapsed Uchumi Supermarkets, should follow through on the actions required to resolve the woes of the company, its investors and creditors are facing.
Years after going bankrupt, it has not made any payments to its creditors under the so-called Company Voluntary Agreement (CVA). The shares of the company, meanwhile, continue to attract informed and uninformed speculators on the Nairobi Securities Exchange.
Uchumi had planned to sell its remaining assets, consisting mainly of properties, to repay creditors. This included the land it holds on Langata Road, Nairobi.
But the proposed sale was abandoned after the government said it would compulsorily acquire it for its own use. This has not happened, leaving creditors in perpetual uncertainty.
The High Court has now authorised UBA Bank to sell the Langata Road land, noting that secured creditors cannot be taken round in circles forever. The bank is owed Sh162 million.
If the government is serious about the strategic value of the land, this is the time to make the prompt purchase of the same. If not, the State should let Uchumi find another buyer of the asset and not block such a transaction.
The money raised will be used to settle the amounts owed to creditors, based on the seniority of their claims. The government is also among Uchumi’s creditors, claiming Sh1.2 billion.
The courts have now opened the window for creditors to fight for their rights and the government should not be a hindrance once again.