Nakumatt fall costs investors
SEE ALSO: Prelate thanks Pope for new jobPrime 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. However, according to the NSE, maturities on commercial paper “rarely range any longer than 270 days.” Burnt fingers
SEE ALSO: Fears over TZ wildlife corridor“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: Listed firms hit by slowing economyNaivas, 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.