The verdict on 2019 for businesses and the overall economy rang truer with the exit from the stage of a few famous firms whose resilience could no longer hold.
After years of distress, 2019 proved to be the final nail in the coffins of brands such as Mumias Sugar, ARM cement and Nakumatt.
The year was also not kind to betting firms, with the exit of sporting giants Sportpesa and Betin over a tax dispute with the Government.
The 2019’s tag as worst for businesses was cemented by a market report that showed that the benchmark index for the 20 best performing counters – the NSE-20 share index had dipped 6.3 per cent compared to 2018.
2019 culminated in the taking over of cash-strapped ARM in October by steel magnate Narendra Raval, who acquired it for Sh5 billion. This brought an end to a 45-year stewardship of the cement maker by the Paunrana family.
It also put Raval up in the cement producing ladder in the region when production capacities of National Cement, owned by his Devki Group and ARM are combined.
Doom was spelt for ARM in 2018 when it was put under administration PricewaterhouseCoopers (PwC), who took over the management of the debt-ridden cement maker to keep away creditors from attaching its property.
Mumias sugar company
Once a common sight in many household shelves, Mumias Sugar Company’s sweetener was unable to see the end of 2019. The listed miller was in 2019 put under receivership by KCB Group after it defaulted on loans totalling Sh12.5 billion. The amount is owed to KCB and other creditors such as Treasury and the Kenya Sugar Board.
The bank appointed PVR Rao to take over the miller. At least Sh5 billion is required to revive Mumias Sugar Company, according to a task-force set up by the Kakamega County Government.
As the curtains fell on 2019, former retail giant and once Kenya’s biggest supermarket chain, Nakumatt shut its branch in Prestige Mall, dimming hopes of recovery. The last few years had seen the supermarket that once chatted the Walmart way and operated over 30 branches, including regionally, fall on hard times with about a Sh40 billion debt owed to suppliers, manufacturers and landlords.
The supermarket’s outlets have been taken over by foreign supermarket chain Carrefour and local rivals such as Naivas and Tuskys.
The government-owned Uchumi Supermarkets is hanging by a thread and staring at imminent death. The retailer spent a better part of 2019 pleading to have part of its multi-billion shilling debt written off to enhance its survival.
In March, it filed a creditors plan in the High Court, laying down steps needed to save it from collapse. It owed suppliers more than Sh3.6 billion and lenders Sh3 billion.
It was also reported that it had requested the Ministry of Trade to support its laid down revival plan or risk liquidation. This is in the back of a looming forced sale of Lang’ata Hyper by UBA Bank.
New regulations such as introduction of a 20 per cent excise tax on betting stakes saw the exit of the biggest betting firms Sportpesa and Betin after months of a back and forth with the government.
The two betting firms along with others such as Betway and Betpawa have in the past two years contributed Sh5 billion in sponsorship to various sports events, including football, rugby, boxing, rally and athletics.
Football has become the biggest casualty of their fallout with the government, with some teams now struggling to stay afloat. The firms also partly contributed to the exchequer.