After amassing about USD150 million in debt since the beginning of this year, Kenya’s Nakumatt Supermarkets will be merging its operations with Tuskys.
The company said the merger will be used as a strategy to fixed its collapsed cash flow, a development that has led to the closure of many outlets across the country.
In a chat with Reuters, Atul Shah, the managing director of Nakumatt did not confirm if the merger will solve the cash flow problem of the company but he confirmed that “It is a start.”
He told Reuters that more details on the deal will be released later in the day, he said. Tuskys was not available for immediate comment.
According to Reuters, an attempt to sell a 25 percent stake to a foreign fund for $75 million, as reported in January, failed, leaving Nakumatt with empty shelves as suppliers balked at providing stock.
The growing economies of East Africa have drawn in foreign retailers including Botswana’s Choppies, South Africa’s Game Stores and French retailer Carrefour through its Dubai-based franchisee Majid al-Futtaim.Nakumatt, which started with a single store in Nairobi in 1992, operated 68 outlets in Kenya and neighbouring states Rwanda, Uganda and Tanzania at the start of the year but it has since closed some due to the financial troubles.
