Tuskys goods seized by landlords of the supermarket's 20 branches

Landlords of at least 20 branches of Tuskys Supermarket have seized the supermarket's goods over accumulated rental arrears. 

The move has caused Tuskys management to move to court to pressure its landlords into releasing its assets so that it can implement strategies for rescuing the retail giant. 

Selling pre-selected non-core assets to facilitate  operation resumption will be the main strategy for them to pay their creditors, the management told the court. 

Tuskys has set a target of Ksh911.5 million which  it believes will be enough to facilitate the restocking of its other outlets and the settlement of unsecured debts.

However, in response to the retailer's rent default in Nanyuki Mall, Eldocenter, Shiloa, Mtwapa Mall, Mega Mall, Pioneer and Karen Crossroads, landlords have obtained orders to seize its assets. 

Other branches include Lolwe in Kisumu, Ananas in Thika, Buru Buru, Juja City Mall, Chigware, Milele, Kitengela, Adams, Malindi, Northview, Uthiru and Mirema.

On behalf of the retailer, lawyer Patrick Onyango said, “The applicant has already identified potential purchasers of the aforementioned non-core assets, which purchasers similarly operate and run supermarkets under various names and styles. These intended purchasers shall, in addition to purchasing the applicant’s non-core assets, take over the applicant’s premises as new tenants in the said outlets." 

Already, Tuskys has made an agreement with Diamond Trust Bank (DTB) which holds a security interest over the assets designated for sale.

The retailer's plans to raise money has however been slowed down by the continued closure of the outlets by landlords. 

“On this premise, the applicant continues to accrue rental and utility arrears on the premises and the assets continue to remain at risk of dissipation and predatory creditor actions,” Onyango added.

Tuskys also seeks to sell a majority of its stake to a private equity firm and an undisclosed retailer. Therefore, it needs to raise capital which will ease its financial pressure and give it adequate time to negotiate the sale of the stake.

The retailer said that it requires at least Sh2 billion for survival in the short-term.