Tuskys strikes deal with suppliers to continue providing goods
What you need to know:
- The planned move has, however, faced a fresh round of squabbles among siblings who own Tuskys.
- Mr Yusuf Mugweru, the fourth born of the seven siblings, has vowed to block the deal.
- He said wrangles among the retail chain’s shareholders are yet to be resolved.
Supermarket chain Tuskys has secured a deal with its suppliers to continue providing it with goods pending the sale of a majority stake to a strategic investor.
Tusker Mattresses Limited (TML) said under the agreement, suppliers have signed a “short-term portal” that will ring-fence their wares and ensure timely payment.
“This option provides a much-needed lifeline for the business and secures a win-win stability option,” said TML chairman Bernard Kahianyu in a public notice Tuesday.
The retailer had by June paid suppliers a total of Sh2.7 billion as it raced to beat a regulatory deadline to settle its obligations, which had remained outstanding for months.
PAY SUPPLIERS’ DEBT
This was after the Competition Authority of Kenya (CAK) ordered it to pay suppliers a debt of Sh1.2 billion by July 16 after a group of companies complained to the watchdog over the retailer’s default.
Besides the Sh884.3 million supplier debt admitted by Tuskys, the regulator also discovered that it owed an additional Sh400.9 million through an independent investigation.
CAK, however, says Tuskys has presented a new plan to settle the balance over the next four months.
Mr Yusuf Mugweru, the fourth born of the seven siblings who own Tuskys. He has vowed to block the deal to sell a majority stake to a consortium, saying wrangles among the retail chain’s shareholders are yet to be resolved. PHOTO | FILE | NATION MEDIA GROUP
The retailer is looking to sell a majority stake to a consortium comprising a private equity firm and an undisclosed foreign retailer as part of efforts to raise cash to pay suppliers and win back their confidence if it is to beat the tough times.
The planned move has, however, faced a fresh round of squabbles among siblings who own Kenya’s second largest retail chain.
Mr Yusuf Mugweru, the fourth born of the seven siblings, has vowed to block the deal, saying wrangles among the retail chain’s shareholders are yet to be resolved.
Mr Mugweru, with a 17.5 per cent stake in Tuskys, reckons his brothers are yet to disclose the whereabouts of some Sh1.6 billion that was the subject of a court suit and is also demanding a forensic audit of the store’s accounts covering the past eight years.
