Nakumatt convenes meeting for its creditors

A deserted Nakumatt Nyali branch in Mombasa last October.FILE PHOTO | NMG
A deserted Nakumatt Nyali branch in Mombasa last October.FILE PHOTO | NMG 

Cash-strapped retail operator, Nakumatt, has convened a creditors’ only meeting to be held at Westlands’ Oshwal Centre in Nairobi on March 14.

In a notice published Sunday in the dailies, Nakumatt administrator Peter Kahi said they plan to present their rescue proposals to the creditors where a position on the way forward will be made.

“The administrator will in due course circulate his proposals to all creditors with claims against the company, for their consideration at the creditors’ meeting,” it said.

Mr Kahi said only creditors whose proof of debt has been lodged with the administrator before the meeting will be allowed to vote for or against the rescue proposal.

According to court papers, Nakumatt’s creditors mainly suppliers, manufacturers and landlords, are demanding about Sh40 billion.

Among issues to be discussed include Mr Kahi’s notice to lay off 800 employees to ease its operational costs as the once regional retail leader has a large number of workers capable of running 45 stores against the present 13 stores.

“As part of the business recovery strategy, we have commenced a rightsizing exercise. This exercise is geared towards aligning the human resource base with the current organisational needs,” Mr Kahi said in an earlier interview.

But Kenya Union of Commercial, Food and Allied Workers (Kucfaw) secretary- general Boniface Kavuvi has strongly opposed the layoff plans, saying Mr Kahi was yet to obtain declaration of insolvency as required by law.

While Nakumatt had over 4,000 employees at its most glorious moments of growth, the administrator said he was yet to establish how many are left especially after several stores were closed prompting an exodus of workers in the last six months.

Mr Kahi took over Nakumatt’s management from founder-chief executive Atul Shah on January 22 pledging to restore the ‘elephant’ (Nakumatt’s trade symbol) to its former glory.

Mr Shah said the administration will serve to accelerate ongoing recovery efforts that have already seen the restocking of eight key branches with support from rival retail chain, Tusky’s. The replenished outlets are Mega, Prestige, Galleria, Lavington, Ukay, Ridgeways, Nakuru and Village Market.