UBA eyes Uchumi land on old loans
Troubled Uchumi Supermarkets could lose a prime parcel of land on Lang’ata Road as UBA Bank eyes it to recover a Sh250 million loan extended to the ailing retail store in 2016.
In a petition for insolvency, UBA says it is a secured creditor of Uchumi Supermarkets holding charge of the supermarket’s Langa’ta plot of land.
The lender says Uchumi has failed to comply with a voluntary debt settlement plan reached by creditors in March last year. UBA says creditors agreed to enforce security over the company’s property with the consent of the court.
“The company has failed to comply with the conditions as set out in the ruling dated 1st July, 2020 and thus the applicant/bank seeks to enforce its security over that property known as Land Reference Number 209/12593 Nairobi,” UBA said through its lawyers Nyaanga and Mugisha advocates.
UBA claimed that Uchumi’s failure to review and meet the terms of the company voluntary arrangement has had a detrimental effect on the bank as a secured creditor as it unjustly relieves the company of its obligation to service the loan facility extended to it.
Reviving retail store
“They have been given so much time to revive the store but it appears nothing is going,” said Bernard Mugisha of Nyaanga and Mugisha Advocates acting on behalf of UBA. Mugisha said on phone that the debt is now over Sh250 million.
The bank seeks to sell off Uchumi’s land on Langata Road, Nairobi to clear the debt, however, the retail store obtained court restraining orders against all creditors seeking to sell off its properties.
UBA suffered a setback when its earlier attempt to sell-off Sh2.8 billion Kasarani land was stopped by the High Court when Uchumi argued that the land belongs to a subsidiary of the retailer which is an independent entity.
The bank now wants the order restraining it from disposing off the Langata land vacated, arguing that Uchumi failed to disclose that it was in the process of selling its assets when it obtained the orders.
The bank claimed that delay in settlement of the debt is hurting its financial health given that the funds were obtained from depositors.
“The company has been in default of its facility for close to 4 years which is a huge concern to both the bank and its regulators given the negative impact it has on its depositors’ funds,” said UBA.
Struggling lender
UBA has in the last couple of years lent money to companies that ended up defaulting or shutting down such as Nakumat, ARM, Uchumi and Deacons that have left it struggling.
The firm has been fighting creditors to stave off an ongoing scramble for its assets.
Uchumi wanted to sell the Langa’ta land to enable the company to run as a going concern but creditors would have none of it.
Creditors’ claims that have been filed against the struggling retail chain in the ongoing winding up petition are approaching Sh1billion, with 34 companies seeking its dissolution, including Githunguri Dairy Farmers Co-operative Society.
Uchumi has injected life back to its Lang’ata hub by out spaces hoping to fetch more income from renting out the spaces whose charges range from Sh2,500 for smaller spaces to Sh10,000 for premium spots.
