Regional Supermarket chain, Nakumatt Holdings’ troubles continue to deepen every passing day, Business Focus reports.
A source privy to the situation reveals that Nakumatt Uganda workers have gone four months without pay.
“The situation is terribly bad. Many employees have fired themselves after realizing that the situation may take long to be fixed,” the source said.
The source added that Nakumatt may be forced to close another branch located in Bukoto, an upscale Kampala suburb.
“The selves are noticeably empty. Many suppliers haven’t been paid for years,” the source said.
It is worth noting that Nakumatt Uganda closed three branches including Acacia Mall; Kololo, Village Mall, Bugolobi and Victoria Mall, Entebbe.
“The supermarket space at these malls will go under redevelopment to add additional value to our shoppers and their shopping experience. We humbly regret any inconveniences caused, but keep watching this space to see how your shopping experience is taken to a new level in Uganda,” the statement signed by Knight Frank Uganda head of retail Marc du Toit read in part.
Nakumatt Holdings is now looking for “local and international financiers” for a capital injection.
Business Focus recently reported that the Kenyan based Supermarket is seeking a bailout from the Government of Uganda to survive the current financial storm.
A source privy to the ongoing discussions revealed that if government doesn’t intervene by giving the Supermarket a tax waiver until it stabilizes, it (Nakumatt) may cease operations in Uganda just like Uchumi quit Uganda in 2015.
Reports indicate that Nakumatt’s gross debt more than tripled to Shs525 billion in February 2015 from Shs147 billion in 2011, piling pressure on operations and resulting in long payment delays to suppliers.
On October 27, 2016 Nakumatt Holdings, with presence in Kenya, Uganda, Rwanda, and Tanzania admitted it was facing cash flow problems. In a statement, the company revealed that it was in talks with “local and international financiers” for a capital injection. The retailer said its problems arose from “unforeseen business challenges,” specifically a downturn in economic activity, higher operating costs, and external factors like managing risks associated with security threats in Kenya.
The retailer is currently working on a $75 million deal to sell a 25 per cent stake to a strategic investor to retire its heavy debt burden.
According to the Standard, Nakumatt is reeling under a KSh30 billion debt (over Ush1 trillion). This makes the recovery of the regional retail chain, whose debt position in the public domain has been put at KSh18 billion, more tasking.
Founded in 1987, Nakumatt is a wholly Kenyan, privately held company, owned by the Atul Shah family.
Atul Shah is the Managing Director and Chief Executive Officer of the Nakumatt Holdings Limited, the parent company of Nakumatt Supermarkets.