Tuskys News: Tuskys Supermarket is grasping on straws and needs Sh. 2 billion immediate capital injection to survive.
This has been revealed through a board meeting of the retailer’s invest vehicle known as Orakam Holdings.
“Tuskys’ current financial position is very weak and may not support the business for much longer. Tuskys requires immediate capital injection amounting to Sh. 2 billion,” the directors of the investment vehicle were told during a meeting that was held on June 30. This board meeting was attended by sibling owners Stephen Mukuha, Sammy Gatei, Yusuf Mugweru and George Gachwe, who own a 17.5 per cent stake each in the retailer, and John Kago, Mary Njoki and Kenneth Njeri, who each hold a 10 per cent stake.
It has also been revealed that the Diamond Trust Bank has extended the retailer’s credit facility. This is to allow for the new funds to be raised.
“While Tuskys informed the Competition Authority of Kenya (CAK) — which is concerned about the retailer’s mounting supplier debts—that it will close the equity deal by end of July, the shareholders were told the share sale could delay to December,” a report that appeared in the Business Daily said.
Last week, a fresh sibling fight emerged to throw the planned sale of a majority stake to a strategic investor. This is after the fourth born in the family of seven announced that he will block the proposed majority stake sale that is aimed at rescuing the retailer from collapse.
Mr. Mugweru said that the wrangles that have dogged the retailer for years now are yet to be resolved. “They reached out to us last Sunday to support the share sale, but we have declined unless past problems are resolved,” he said through his lawyer, Philip Murgor.
His main bone of contention is some Sh. 1.6 billion whose whereabouts he says is unknown. He is also demanding a forensic audit of the retailer’s accounts covering the past eight years. In May 2016, two brothers and co-owners of Tuskys were charged with theft of Sh. 1.64 billion from the retail chain. Stephen Mukuha and George Gachwe were charged with five counts of theft and set free on a cash bail of Sh. 1 million or Sh. 3 million bond each. The duo was accused of stealing the money “on diverse dates between 2002 and 2012. In November 2013, though, the High Court dismissed the case and ordered the siblings to settle the matter out of court. Tuskys News.