Nakumatt survives third liquidation attempt
By Wainaina Wambu | March 18th 2021
The High Court has ruled against the liquidation of Nakumatt Supermarket, extending the term of its administrator Peter Kahi from PKF for the third time.
Kahi (pictured) had argued that the extension would help in the recovery of between Sh3 billion to Sh4 billion, monies that are tied to ongoing court cases for and against the retailer.
Justice Alfred Mabeya ruled in favour of the administrator, arguing that there were debts and court cases that required to be “managed for the benefit of the retail chain”.
“In his report, the administrator has shown that although the company has no property that can be distributed to its three creditors, there are debts out there as well as cases that require to be managed for the benefit of the firm,” ruled Mabeya.
“That is the premises on which the firm should not be liquidated but let it remain as it were,” said the judge.
Kahi was appointed administrator in 2018 by the court after an insolvency application against Nakumatt filed by Primrose Management Ltd, Sunmatt Ltd, Compulynx Ltd, Jade Concepts Ltd - the unsecured creditors owed Sh512 million.
Nakumatt collapsed with Sh40 billion debt and creditors last year voted to have it liquidated.
Mabeya said though the update report that Kahi was required to file was not “rosy”, it showed some slight recovery of funds.
Since taking over as administrator, Kahi has raised Sh5.2 billion with Sh3.5 billion paid to creditors, including Sh766 million payments to landlords.
In his first creditors’ meeting, Kahi argued that liquidation would have meant that out of a total of about Sh40 billion owed creditors, Sh30.6 billion was unlikely to be paid.
The administration extension is normally a year but the court did not specify.
In his appeal to the court, Kahi, however, noted that the extension was “ultimately towards a dissolution”.
Kenya's brand value up by 8pc in one year on UK trade deal
- No questions over million shilling transactions opens taps for campaign billions
- Amid job losses, loyalty wanes as priorities change for most workers
By Peter Theuri
- Want to become a millionaire? Follow Warren Buffett’s 4 rules
- Financial discipline: Educate children when they are young
- Bonds boost NSE as investors shy away from equities