Lifeline for Tuskys as retailer receives KShs2 billion from Mauritius fund
The financing will help the supermarket chain resolve its financial challenges.
Supermarket chain Tuskys has received a KShs2 billion bailout from a Mauritius based fund to address its debt payment challenges.
The financing that will likely revive its dwindling fortunes will be however subject to preset conditions.
“The Tusker Mattresses LTD Board of Directors is pleased to confirm that we have have signed terms of agreement with a Mauritius based fund for the provision of a financing facility amounting to just over KES2.0 billion subject to fulfilling transaction condition precedents,” the Chairman Bernard Kahianyu said in a statement.
Trouble began at the retailer when the supermarket chain began delaying payments to its suppliers as well as rent leading to the closure of some of its branches.
After auctioneers raided one of the branches in Kisumu County at United Mall, the supermarket paid KShs15 million out of the Ksh26 million it owed, an indication of the cash flow challenges at the retailer.
The funds from the Mauritius based fund will possibly avert the collapse of the retailer which employs about 6000 employees in over 63 branches across Kenya and Uganda.
“This funding will help alleviate our current capital constraints impacted by Covid-19 and further reposition the business for increasing stakeholder’s value,” read the statement.
Tuskys, a household name is now riddled with public whispers of its future, with missing popular brands and or empty shelves at its stores compounded with cash flow woes.
The supermarket owes suppliers KShs6.2 billion.
However, in June, it paid KShs2.7 billion to its suppliers after intervention from the Competition Authority of Kenya (CAK).
Tuskys is under the Ministry of Trade’s watch list following its failure to meet contractual obligations with suppliers.
“As previously communicated, we wish to reiterate our commitment to resolve the underlying working capital challenges quickly. This funding will provide the needed impetus to our overall capitalization journey,”
The details of the agreement are yet to be undisclosed.