[ad_1] Nakumatt mall at city hall remain closed during the Supreme court detailed on Judgement day on 20 September 2017 . [File,Standard]Schools, wealth management funds, insurance agencies and individuals are among 800 commercial debt paper holders who have lost Sh4 billion from fallen retail giant Nakumatt.
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[ad_1] Nakumatt mall at city hall remain closed during the Supreme court detailed on Judgement day on 20 September 2017 . [File,Standard]Schools, wealth management funds, insurance agencies and individuals are among 800 commercial debt paper holders who have lost Sh4 billion from fallen retail giant Nakumatt.
A commercial paper refers to an unsecured short-term debt instrument issued by a firm. The money raised is used to finance accounts receivable, inventories and to meet short-term liabilities, according to the Nairobi Securities Exchange (NSE).
The Standard has obtained a list of the institutions owed more than Sh50 million, which range from well-established wealth management firms to obscure little-known companies.
Some of the big firms...
[ad_1] Nakumatt mall at city hall remain closed during the Supreme court detailed on Judgement day on 20 September 2017 . [File,Standard]Schools, wealth management funds, insurance agencies and individuals are among 800 commercial debt paper holders who have lost Sh4 billion from fallen retail giant Nakumatt.
A commercial paper refers to an unsecured short-term debt instrument issued by a firm. The money raised is used to finance accounts receivable, inventories and to meet short-term liabilities, according to the Nairobi Securities Exchange (NSE). The Standard has obtained a list of the institutions owed more than Sh50 million, which range from well-established wealth management firms to obscure little-known companies. Some of the big firms that burnt their fingers include investment management firm Cytonn and insurers such as the South African-headquartered Sanlam, CIC Insurance Group and Kenindia Assurance. SEE ALSO : Cutting it in the jewelry business Prime and Habib banks are also on the list. The Kianda Foundation, an educational trust, is also owed more than Sh50 million. It was not clear when the papers, which are regulated by the Capital Markets Authority (CMA), were issued or their maturity dates. For More of This and Other Stories, Grab Your Copy of the Standard Newspaper. Subscribe Now » However, according to the NSE, maturities on commercial paper “rarely range any longer than 270 days.” Burnt fingers SEE ALSO : Hansen preps All Blacks for unlikely kicking contest against England “The debt is usually issued a discount, reflecting prevailing market interest rates,” says the NSE. The commercial paper holders lent Nakumatt money to fund its operations and expected to accrue an interest. Instead, they burnt their fingers and won’t get a dime. Nakumatt was put under administration in January 2018 to save it from creditors. The final nail in its coffin was driven last week when creditors, who are owed Sh38 billion, unanimously voted to liquidate it. The court will appoint a liquidator on Friday this week. Speaking to The Standard last week, Peter Kahi, Nakumatt’s court-appointed administrator, said they "couldn’t claim anything back." SEE ALSO : Floods: Change tack in disaster response The suppliers, who are owed Sh18 billion, might get 46 per cent VAT refunds. “The guys who will walk home with zero are the commercial paper holders. They have lost everything,” said Mr Kahi. The banks, which are owed billions, are the secured creditors and will have first charge over the Nakumatt head offices. And if any payments are done after liquidation, the administrator, banks and Kenya Revenue Authority will be first to be paid. Nakumatt owns no assets, especially after the disposal of its only remaining assets constituting shelves and computers. SEE ALSO : Narok now deploys its first 10 female rangers Naivas, which shares a history with Nakumatt, acquired the fittings and equipment last month for Sh422 million. Kahi ruled out the turnaround of Nakumatt saying it would take years and be costly. The firm, he added, might be operating at a loss during the entire period. Mr Kahi also said the firm has no assets to “collateralise such additional funding.” “The administrator is of the view that it is likely to be difficult to attract an investor to inject in the substantial amount of equity required to restructure Nakumatt Holdings Ltd’s balance sheet due to the current high degree of financial leverage,” he said in a report prepared for creditors. Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE. Related Topics NSE Nakumatt Prime and Habib banks CIC Insurance Group !function(f,b,e,v,n,t,s) {if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)}; if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)}(window, document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('init', '323941174965407'); fbq('track', 'PageView');
