Debt-ridden retailer Uchumi Supermarkets #ticker:UCHM will for the third year in a row delay the announcement of its full-year financials after the October 31 deadline passed without release of the results.
The troubled retailer’s CEO Mohammed Mohammed on Tuesday said it is planning to reach out to the Capital Markets Authority (CMA) to request an extension of the publication period. Mr Mohammed attributed the delay to the ongoing winding up petition against the company by creditors claiming an estimated Sh900 million as per court filings.
Four months have passed since the close of Uchumi’s fiscal year in June. Listed companies that fail to publish financial results according to the guidelines provided by the CMA are subject to fines at a rate provided by the regulator.
Uchumi, which owes creditors and suppliers more than Sh3.6 billion, has been struggling under the weight of debts and a cash crunch that has also affected its ability to pay rent and staff salaries on time. The retail workers’ union has previously said that non-payment of salaries, which began last December, had affected 1,355 employees.
“We have had some delays due to unavoidable circumstances mostly related to the winding up petition. We are reaching out to the CMA and we will give finer details later,” said Mr Mohammed in a response to the Business Daily queries.
Claims against Uchumi in the ongoing winding up petition approached the Sh900 million mark at the beginning of the month after 14 more companies joined the case. Court records show that 20 companies have joined the case filed by Githunguri Dairy Farmers Co-operative Society, bringing the total claims filed against the retailer so far to Sh865 million. Githunguri Dairy moved to court in September seeking to wind up Uchumi over its failure to settle a Sh44.8 million debt.
The retail chain has been banking on the sale of land in Kasarani to turn around its fortunes but the money — estimated at Sh2.8 billion — has been slow in coming because of challenging approval processes.
Uchumi joins other government-backed listed entities including Kenya Power #ticker:KPLC, Mumias Sugar Company #ticker:MSC and East Africa Portland Cement (EAPC) #ticker:PORT that have delayed releasing results citing a myriad of reasons.
Kenya Power, which issued a profit warning signalling a drop in earnings, blames the delay on changes in management. Loss-making Mumias Sugar blamed the delay on financial challenges.