NAIROBI, KENYA, DEC 21 — Uchumi has sought the blessings of shareholders, investors and the public to put its act together as it misses the regulatory requirements for financial audits, in the wake of insolvency.
The Kenya’s oldest supermarket is struggling with a supplier and creditors debt of over ksh3.6 billion, says it has been unable to conduct financial audit for the year ended June 30, 2018. It is seeking leniency to reveal its financial results by March 31, 2019.
According to the Nairobi Securities Exchange (NSE) listed firm, various litigation matters concerning the solvency of the Company, and the lease agreement on Uchumi’s Headquarters offices have destructed its finance team from putting its books together hence the deferment.
“Uchumi will engage its auditors and legal team to plan out the process and to confirm that the recommendations of the finance experts meet, not only the threshold required, but are sustainable,” CEO Mohamed Ahmed Mohamed said in a notice through the NSE.
A tentative commencement date for the audit is proposed for January 2019, subject to conclusion of the stated exercise after which, the audited financial statements will be published before the end of the first quarter.
Uchumi is at logger heads with its suppliers who have moved to court to attach its assets in a debt recovery bid.
Claims filed against the retailer are close to Ksh900 million, with at least 20 companies enjoined in the suit.
“The aforementioned matters are currently being addressed through the courts,” the board and management said, “The board and management therefore requests the cooperation and understanding of our shareholders and stakeholders to give a chance to the team currently constituted to carry out the process aforementioned and ensure compliance with the law and obligations to the stakeholders and shareholders.”
Efforts by government to bail out the retailer have severally stalled.
In 2016, government came up with a Ksh1.8 billion bailout plan for the retailer with the fraction of Ksh500 million being released in January 2017. Uchumi received a second portion of Ksh700 million later in December with the remainder Ksh600 million being for this year.
It has been counting on the sale of its assets to off-load debt while it restocks its shelves. Financial strains have seen to close more than 30 outlets in the country and regionally, including Uganda.
It reported a Ksh1.68 billion loss for the year ended June 30, 2017. In 2016, the retailer posted a Ksh2.83 billion loss.
The retailer has put in place a financial restructuring team to identify and advise on options to settle creditors and restructure its liabilities.
It is also counting on the team to identify and recommend a return to normalcy restructuring plan that will see it restock , re-brand and return to full operations.