Companies

Tuskys finance boss quits

tuskys

Tuskys has lost its chief financial officer Daniel Ndirangu who left last month amid cash flow woes plaguing the retailer. FILE PHOTO | NMG

doreenwainainah_img

Summary

  • Tuskys confirmed that Mr Ndirangu had tendered his resignation in December 2019, staying on to serve his notice period until July 2020.

  • The retailer said it is searching for a new finance chief as the retailer seeks to raise funds, including debt and sale of stake to equity investor, to clear loans and supplier dues.

  • The family-owned business has seen its history marred by wrangles and infighting amongst the siblings over strategy and use of cash, culminating in forcibly removal of executives.

Tuskys has lost its chief financial officer Daniel Ndirangu who left last month amid cash flow woes plaguing the retailer.

Tuskys confirmed that Mr Ndirangu had tendered his resignation in December 2019, staying on to serve his notice period until July 2020.

The retailer said it is searching for a new finance chief as the retailer seeks to raise funds, including debt and sale of stake to equity investor, to clear loans and supplier dues.

The family-owned business has seen its history marred by wrangles and infighting amongst the siblings over strategy and use of cash, culminating in forcibly removal of executives.

Mr Ndirangu had served in the role of CFO for six years before his exit comes as Tuskys struggles to clear more than Sh6.2 billion debt to suppliers. The retailer’s woes have led to supplier defections, stock-outs and closure of some stores.

The retailer on Friday announced that it had disbursed the first Sh500 million to cover immediate capital requirements particularly payments to staff, landlords and suppliers.

The announcement came a day after one of the significant investors in supermarket chain Tuskys, Stephen Kamau, obtained court orders allowing the cash-strapped retailer to fasttrack a shareholder meeting to approve the injection of new capital.

The move is also seen as a manoeuvre to pre-empt obstacles to the planned meeting by another significant shareholder, Yusuf Mugweru, who has been wrangling with his siblings in the family-owned business.

The family wrangles had previously spilled into the C-suite of the retailer after a section of the heirs forcefully ejected the CEO Dan Githua in February 2016 before he was reinstated two months later.

The infighting amongst the heirs has slowed down the plans to get a capital injection into the firm.

The prospective equity investors want all the Tuskys’ seven shareholders to agree and make legal commitments to the sale of a majority stake in the company.

The retailer had estimated that it needed at least Sh2 billion to survive in the short term and has been in the market for new capital and technical expertise to fix its issues.

The planned sale of a majority stake in troubled Tuskys Supermarket has triggered a fresh round of fallout among the siblings who own Kenya’s second largest retail chain that could scuttle the deal.

Tuskys had stated that it had reached an arrangement to pay 40 percent (Sh2.4 billion) of the amount (Sh6.2 billion) over two years.

Tuskys is seeking to sell a majority stake to a consortium made up of a private equity firm and an undisclosed foreign retailer as part of efforts to raise cash to pay suppliers and win back their confidence.