This archive report was first published on 2 January 2020.
On January 22, 2018, Nakumatt was placed under administration, with creditors claiming a total of Sh35.8 billion.
The supermarket chain's financial struggles began when it lost the support of banks and suppliers, defaulting on payments.
According to a report by Parker Randall Eastern Africa, Nakumatt's liabilities surpassed its assets by Sh21 billion in the prior year.
However, the company's shareholder deficit has now widened to Sh27.6 billion, making it even less likely to compensate its creditors.
The enlarged negative equity means Nakumatt has no means of compensating creditors unless it receives a massive new capital injection.
As of the year ended February, Nakumatt's sales had fallen by 70.5 percent to Sh15.3 billion, compared to Sh51.9 billion the previous year.
Despite this, the company's net loss narrowed by 68 percent to Sh6.5 billion, as margins improved.
According to the report, 'These matters indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern.'
