NAIROBI, Jan 7 (Reuters) - Creditors of Kenya’s Nakumatt supermarket chain, once a leading regional retailer, met on Tuesday to vote on whether to wind it up over an inability to pay its debts after a failed rescue attempt.
Nakumatt, which expanded from a mattress shop in a rural town to have branches across Kenya and East Africa, was forced to shut more than a dozen outlets in 2017 as it struggled to pay its suppliers, landlords and other creditors.
A Kenyan court granted Nakumatt Supermarkets protection from its creditors in 2018, allowing what was once Kenya’s biggest retailer to go into voluntary administration.
The High Court also approved Nakumatt’s application to appoint Peter Kahi as an administrator.
Kahi, who works with a Nairobi consultancy, had experience turning around distressed businesses, Nakumatt said at the time.
But on Tuesday he urged creditors to vote in favour of liquidating the chain.
“The earlier we cut our losses the better so we can move on to other things,” Kahi told the meeting on Tuesday.
He had been expected to manage the settling of debts estimated at more than $300 million and try to revive a slimmed down version of the business with about 20 branches, down from 62 at its peak.
When it sought protection in October 2017, the firm had 4,000 staff but it has closed several outlets since then.
One creditor supported the winding up of the company, saying the rescue efforts were not working.
“With the administration process here in Kenya, you spend more money throwing good money after bad,” she said.
Nakumatt had sought protection using Kenya’s newly enacted company laws, which provide a pathway for distressed firms to avoid complete collapse. (Reporting by Duncan Miriri; Writing by George Obulutsa; Editing by Kirsten Donovan)