Nakumatt Seeks Kenya Gov’t Bailout
Supermarket chain, Nakumatt Holdings is seeking a financial bailout from the government of Kenya.
This comes after the Kenyan giant retailer which has a string of branches in Uganda, struggled to attract money from private investors as its crisis spirals out of control.
The Kenyan government which received the appeal has not responded to the request, according to a report published by the Kenyan website Kenyanwallstreet.com.
Nakumatt, which is currently facing serious financial issues, has asked for public funds that would allow it maintain its financial integrity.
Local media have reported that the company’s Managing Director Mr Atul Shah has written to the Principal Secretary for Industry, Trade & Cooperatives Chris Kiptoo saying the Government should bail-out Nakumatt just as they did with state backed Uchumi Supermarkets, Kenya Airways and Miraa farmers.
“If such goodwill can be extended to Nakumatt, we would be very grateful considering the current situation is not Nakumatt’s making whatsoever.” said Mr Mr Atul Shah while blaming the Government for its troubles.
Last week, State Department for Trade on its Twitter handle said Bankers, suppliers and retailers had petitioned PS Chris Kiptoo to intervene on their behalf to have Nakumatt settle outstanding debts. However, the PS said he “wants retail supermarkets to uphold business ethics and Govt won’t bail out those which fail in their financial obligations.”
Just last month, Nakumatt sent more than 100 of its employees on forced leave, delayed salaries of more than 1500 employees and quietly shut down one of the two warehouses where it stores imported goods as well as furniture and electronics.
In April, the distressed retailer said it had began implementing restructuring measures, including personnel cost reductions, closure of several unprofitable branches, reduction of its store keeping unit (SKU) exposure by retaining frequently purchased items and delisting slow moving products. All these aimed at reducing its total cost base by up to Kshs 1.5 billion annually. (1 Kshs = 33UGshs)
Nakumatt’s total debt burden has grown rapidly since 2012 from Sh 4.7 Billion to a substantial Sh 18 Billion during the half year of 2017. Nakumatt is majority owned by Mr Atul Shah and his two sons Akoor Shah and Neel Shah.