This archive report was first published on 7 January 2020.
January 7, 2020
Nakumatt, once a retail giant in Kenya and East Africa, has officially collapsed after its creditors voted unanimously to dissolve the company.
The creditors, including banks, suppliers, and landlords, are owed a staggering Ksh38 billion ($380 million), a debt that Nakumatt was unable to pay despite efforts to revive the supermarket chain.
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, making it difficult to attract an investor to inject the necessary equity to restructure the company's balance sheet.
As a result, the creditors have decided to dissolve the company, marking the formal end of the Nakumatt brand.
The liquidation plan was presented to the creditors in a meeting on Tuesday, and the court will decide on the liquidator on January 17.
Nakumatt's decline began in 2017 when it was forced to shut dozens of outlets due to its struggles to repay suppliers, landlords, and other creditors.
By February 2017, the company had 60 branches, but this number dropped to six by September 2018, and the remaining branches were sold to Naivas in a deal worth Ksh422 million ($4.2 million) in November.
