Tuskys pays Sh2.8b debt, seeks strategic investors
Troubled Tuskys Supermarkets paid its suppliers Sh2.77 billion in the month of June as part of the debt owed to local suppliers, Competitions Authority of Kenya (CAK) has revealed.
The regulator has additionally okayed a payment plan by the retailer in a move expected to clear debts owed to suppliers in the next four months, but suppliers have been urged to verify their debt stock with the retailer.
“Suppliers who may be aggrieved, and have not presented their matters to the CAK, to continue doing so.
This will enable the Authority to establish Tuskys’ accurate debt portfolio,” said Competition Authority of Kenya (CAK) in a statement.
This comes on the back of a CAK investigation on abuse of buyer power since April, targeting retailers who delayed payments to local suppliers beyond the 90 day period prescribed by law.
Over the past 30 days, the Authority has held four meetings with Tuskys to review the documentation submitted and interrogate its proposed debt settlement plan.
“Tuskys has provided documents indicating that it made payments to suppliers amounting to Sh2.77 billion in June 2020 as per the Authority’s order,” CAK said.
“In regard to the presented debt settlement plan, and cognisant of the retailer’s prevailing circumstances, the Authority is amenable to the plan presented that will result in all suppliers’ outstanding invoices progressively settled over a period of four months,” it added.
The retailer now says it is seeking a strategic investor by July 31 this year to raise funding in addition to negotiating repayment terms with suppliers.
Following the April investigations, which involved 25 mid and large retailers, four retailers were found to have delayed payment to suppliers beyond the prescribed period. Tuskys was one of them.
Sales forecasts
CAK then ordered Tuskys to submit records revealing the full extent of debt owed, its financial statements and sales forecasts, among others.
The Authority further required Tuskys to submit a debt settlement plan for all debt owed to suppliers over 90 days, and commence honouring its commitments, while prioritising distressed suppliers and those supplying FMCGs.
CAK will issue a determination within 14 days should Tuskys place a submission seeking to enter into a merger or acquisition now it is looking for a strategic investor.
Some analysts have however called for the prosecution of retailers out to “defraud suppliers”.
“Let’s not be sympathising with these fraudsters masquerading as job creators and builders of the economy.
Let’s start prosecutions, asset tracing and recovery,” said Charles Ouma, a lawyer.
CAK want aggrieved suppliers to present their matter to enable it establish Tuskys’ accurate debt portfolio saying it would conduct weekly compliance checks to ensure the retailer adhered to the debt settlement plan presented.
