Tuskys Supermarket Chief Executive Officer Dan Githua on Friday said the first tranche of credit relief from a private equity firm based in Mauritius will cover its immediate working capital requirements.
The financially troubled retailer says Ksh 500 million part of the Ksh 2 billion expected will be used to pay outstanding staff salaries, pending bills to suppliers, and rent arrears.
“In particular, the first tranche of the suppliers’ old debt amounting to Ksh 321 million has been settled,” said Githua adding that, “In addition, the August arrears for suppliers on the online custodial trading portal have also been settled today (Friday).”
This portal has some 280 suppliers and has so far posted a turnover of more than KSh 1.8 Billion, only eight weeks into its launch.
“We remain committed to ensuring that we progressively continue to meet our liabilities and restore our shopping experience,” said Githua.
The retailer risks getting expelled from its store at the Juja Mall and Greenspan Mall over KSh 30 Million rent arrears despite reopening two of its branches in Malindi and Kilifi. Consequently, Hotpoint Appliances has filed a petition against the troubled retailer in a bid to recover approximately Kshs 250 million debt.
“The retailer’s current financial strain is mainly attributed to reduced revenues amid reduced demand due to constrained consumer spending, and family wrangles among the retail chain’s shareholders thus affecting its operations.
In our view, the continued shutting down of the retailer’s outlets is an indication that the retailer will need to mobilize more funds to stabilize its operations and repay suppliers’ debt,” Commentary from Cytonn Investments.