The High Court has given UBA Bank the greenlight to auction a prime plot that was pledged as security for a loan taken out by troubled Nakumatt supermarkets.
The vacant 1.7-acre land, owned by Park View Shopping Arcade and situated in Westlands opposite Westgate Shopping Mall, will be sold to recover over Sh118 million.
Justice Mary Kasango last week dismissed an application by Nakumatt’s administrator Peter Kahi in which he sought to restrain the bank from auctioning the property.
The judge ruled that the property does not belong to Nakumatt and therefore a court order that halted claims against the retail chain cannot protect its sale.
UBA Bank said it advanced Sh250 million to Nakumatt Holdings in December 2015, which was enhanced to Sh347 million in October 2016 under guarantee of the property.
“In the circumstance, I decline to grant an injunction to restrain the bank from realising the security. The application dated March 27, 2018 is dismissed,” ruled Justice Kasango.
The ruling potentially exposes other Nakumatt guarantors to similar suits.
The once regional giant is fighting to stay afloat, and has so far released most of its branches, retaining only seven.
Mr Kahi in separate documents filed in court disclosed that the new revival plan he has drawn is not dependent on any external capital injection or bank borrowing to succeed.