NAIROBI, Kenya, Jun 27 – Struggling Uchumi Supermarkets plans to restructure its balance sheet amidst hurdles in access to funding.
Chief Executive Officer Mohamed Ahmed Mohamed has told the Senate Tourism, Trade and Industrialization Committee that the retail chain is in the process of finalising negotiation on the conversations of 50 percent suppliers’ debt to unlock a Sh1.8 billion shillings government loan.
“The option had been declined by major suppliers with only 22 suppliers showing willingness,” Mohammed said.
The Supermarket chain, which has closed over two dozen branches due to rent arrears and low stock volumes, has told the Senate committee that it hopes to avail a minimum net amount of Sh1.6 billion taking in account the property settlement with Sidhi Investments.
The Senate team pledged to mediate in expediting the sale of the 20-acre land located in Kasarani to allow the retail chain to settle part of the debt owed to suppliers.
KCB group declined Uchumi proposal of a bridge financing of Sh800 million, while an interested investor who had made an offer of injecting Sh3.5 billion pulled back.
Going forward, Uchumi is seeking to pursue pre-financing investors, as well as renegotiate supply chain financing with banks and suppliers.
“The government also needs to immediately release the balance of the Shareholders loan of Sh600 million as funds were put on hold,” he noted.
The company had a negative capital position of Sh4.68 billion as at the end of April 2018.