Uchumi wants 70 per cent debt write-off

Uchumi Supermarkets wants creditors to take a 70 per cent cut on their debt as a windfall from the sale of land at Kasarani, Nairobi looms.

The troubled retailer has entered into an agreement with Jewel Complex Limited to sell the land for Sh2.8 billion and a Sh330 million deposit has reportedly been paid, which has excited creditors of the retail chain.

Once the money lands in its accounts, Uchumi wants the creditors to agree to a partial write-off of debts and interest to allow it to fund its recovery plan.

“These assets will be the main source of funding required to settle the company’s liabilities. However since the amount owed by the company is higher than the expected proceeds, a debt restructuring is necessary which will entail negotiating for interest waivers, an extension on the Government loan moratorium and haircut,” Uchumi Interim Advisor Owen Koimburi said in court filings.

The retailer is aware that the money, possibly its last hope for redemption, is being trailed by numerous creditors who are owed billions.

Already, UBA Bank had attempted to get court orders giving it priority over the proceeds but the application was thrown out by the High Court.