NAIROBI (Reuters) - A Kenyan court on Monday granted Nakumatt Supermarkets protection from its creditors, allowing what was once Kenya’s biggest retailer to go into voluntary administration.
Nakumatt, which expanded from a mattress shop in a rural town to have branches across Kenya and East Africa, was forced to shut more than a dozen outlets last year as it struggled to repay its suppliers, landlords and other creditors.
The High Court said in its ruling that it approved Nakumatt’s application to appoint Peter Kahi as an administrator. It said he would take up his role soon.
Kahi, who works with a Nairobi consultancy, had experience turning around distressed businesses, Nakumatt said.
He is expected to manage the settling of debts estimated at more than $300 million and would try to revive the business in a slimmed down version with about 20 branches, down from 62 at its peak. When it sought protection in October, the firm had 4,000 staff, but it has closed several outlets since then.
“It is hoped and expected that the administration order, if properly executed will be beneficial to all the creditors,” Judge Fredrick Ochieng said.
The company sought protection using Kenya’s newly enacted company laws, which provide a pathway for distressed firms to avoid complete collapse.
Nakumatt welcomed the ruling saying it had a “strong underlying sustainable core business that is capable of a turnaround with the support of all stakeholders.”
No creditors were immediately available for a comment.
Reporting by Duncan Miriri; Editing by Alexander Smith and Edmund Blair