Uchumi Supermarkets Plc has received a boost in its recovery efforts
Uchumi Supermarkets Plc has received a boost in its recovery efforts after the High Court (Commercial and Tax Division) approved the Company’s Voluntary arrangement (CVA) that was passed at the creditors meeting on March 2 2020. The court ruling that was delivered on July 1 2020 gives Uchumi the go ahead to implement the CVA which will see the retailer offset some debt, pay off part of the remainder in phases and write off a portion of payables. The payment plan will be implemented over a number of years as per the CVA that was filed in Court.
“The decision gives us a chance to implement our recovery plan. We are very much aware of the challenges in the retail sector which has been worsened by the COVID-19 pandemic but management is engaging with all stakeholders with a view of supporting the industry,” said Uchumi Supermarkets Plc CEO Mr. Mohamed Mohamed in a statement.
The CVA will however be subject to a periodic review through a creditors’ meeting every six months where creditors and other stakeholders will appraise implementation of the CVA and the financial wellbeing of the retailer. As part of the CVA Uchumi will look into new business models including but not limited to implementing digital strategies, moving into the convenient store model and adopting cost leadership strategies. Mr. Owen Koimburi, the legally appointed insolvency practitioner, will implement the CVA. Mr. Mohammed added that the retailer continues to search for strategic partners and other potential investors.