KENYA – Troubled Kenyan retailer, Tuskys Supermarket has announced that it has received the first tranche of the earlier announced Ksh. 2 billion (US$18.4m) credit facility from an undisclosed Mauritius based fund, to help shore up its wobbling financial position.
The first capital injection amounting to Ksh. 500 million (US$4.6m) will be utilized by the retailer to cover immediate working capital requirements including partial settlement of its staff, suppliers and landlords pay, indicated Tuskys in a corporate update.
“We have received the first tranche of the earlier announced Ksh2 billion (US$18.4m) credit disbursement today. This first tranche disbursed today amounts to Ksh500million (US$4.6m) and will cover immediate working capital requirements including partial settlements to our staff, suppliers and landlords among others,” said Tuskys CEO Dan Githua.
As highlighted by Tusky’s in the update, Ksh.321 million (US$2.9m) has been utilized to offset old debt.
“We remain committed to ensuring that we progressively continue to meet our liabilities and restore our shopping experience.”Dan Githua – Tuskys CEO
Tuskys has also revealed that August arrears for suppliers on its online custodial trading platform have been settled.
The retailer put in place a system where by money paid at the till by shoppers is deposited in an escrow account, from where suppliers’ dues are first settled and the balance left to Tuskys. This is aimed to stop the supermarket chain from directly handling suppliers’ cash.
In the update, Tuskys has indicated that its recently introduced online portal has more than 280 suppliers and continues to enjoy immense support with more than KSh.1.8 billion (US$16.6m) turn-over, barely eight weeks into its launch, driven by the Cover-19 pandemic.
“We remain committed to ensuring that we progressively continue to meet our liabilities and restore our shopping experience,” said Dan.
The cash-crunch facing the retailer has seen it risk expulsion of tenancy, auctioning and staged protests by former employees.
According to a report by The Standard, top managers of the chain are resigning as uncertainty over its turnaround deepens.
The exiting list includes supply chain managers, branch managers and a top security official over reasons varying from delayed salaries and a bleak future of Kenya’s second-largest supermarket chain.
The family-owned retailer is sitting on pins and needles due to debt running into billions.
The supermarket chain’s troubles have been riddled with mismanagement, in addition to internal wrangles and sibling rivalry who are also the shareholders.
It is still not clear whether the recent funding involves a share sale as part of the agreement but the capital injection is aimed to make it more attractive to strategic investors it is courting.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE