Shoe retailer NBV faces liquidation over Sh5m debt
A K-Shoe outlet in the Nairobi CBD.
Troubled shoe and leather accessories retailer, Nairobi Business Ventures Limited (NBV), has been ordered by a court to pay Sh5.2 million to a local investment company or face liquidation.
This follows the issuing of an insolvency notice by the High Court in Nairobi and its subsequent publication in the dailies on Wednesday December 23. In the notice, the Commercial and Tax Division court orders the K-shoe brand retailer to pay the rent arrears to Greenhills Investment Limited within 21 days.
The notice issued on December 2, 2020 further gave NBV three weeks to settle the debt which was accrued through non-payment of rent, failure to which Greenhills Investment will be allowed to file a liquidation order.
“Take notice that within 21 days after service of this notice on you, excluding the day of such service, you shall pay to Greenhills Investment Limited the sum of Sh5,238,436.70 (includes rent and interest to date) November 19, 2020 claimed by Greenhills Investment Limited,” the insolvency notice E068 of 2020 states.
In the notice, Greenhills is listed as the creditor and Nairobi Business Ventures as debtor, and the latter has been allowed put forward a counter-claim, set-off or cross-demand against Greenhills in case of any.
“You shall secure or compound for the said sum of Sh5.2 million to Greenhills Investment Limited’s satisfaction or to the nsatisfaction of the court; or you shall satisfy the court that you have a counter-claim, set-off or cross-demand against Greenhills Investment Limited,” the document says.
Nairobi Business Ventures, an NSE-listed firm that has been in business since 2013, has been making losses in recent years. Non-payment of rent started taking a toll on its operations last year with some of its stores being closed by landlords.
In March this year, the company issued a profit warning, indicating that it expected its earnings to fall by at least 25 per cent of revenues recorded in 2018.
“This announcement is based on the forecasted financial results of the Group for the year ending March 31, 2020. In light of declining shoe business in particular and retail business in general, Nairobi Business Ventures has been working on a transaction and has focused on delivering on this initiative that will guarantee the viability of the Company for the benefit of the shareholder,” said Vasu Abotula, the company’s Chief Executive Officer.
That was a day before the company issued a cautionary announcement to the public, indicating it was in discussions to seek a strategic investor as part of efforts to turn around the company’s performance.
“This transaction, if successfully concluded, may have a material effect on the price of the Company’s securities,” NBV said on March 27.
Last month, the company’s shareholders approved a Sh83 million investment by Delta International FZE, a Dubai-based firm, giving it 84 per cent stake in the company.
