This archive report was first published on 7 January 2020.
January 7, 2020, marked a significant day for Nakumatt, as its creditors voted to dissolve the once giant retailer. The decision came after efforts to revive the supermarket chain failed.
The creditors, including banks, suppliers, and landlords, are owed a staggering Sh38 billion. This vote marks the end of the road for Nakumatt, with the court set to decide on the liquidator on January 17.
According to Peter Kahi, the court-appointed administrator of the troubled retail chain, an attempted turnaround of the business would be costly and likely to result in losses. He stated, 'An attempted turnaround of the business would be very costly and the company is likely to be lossmaking for the better part of the turnaround window, implying that such a turnaround would need to be financed by additional debt to sustain operations before achieving breakeven.'
Mr. Kahi also noted that the company has no assets to collateralize additional funding, making it difficult to attract an investor to inject the substantial amount of equity required to restructure NHL's balance sheet.
Nakumatt's struggles began in 2017, when it was forced to shut dozens of outlets due to its inability to repay suppliers, landlords, and other creditors. By February 2017, the company had 60 branches, which dropped to six in September 2018. The six remaining branches were sold to Naivas in a deal worth Sh422 million in November.
