Auctioneers Monday shut down Tuskys Supermarket store in Nairobi’s Greenspan Mall over Sh30 million rent arrears, highlighting the depth of the retailer’s financial woes.
In an early morning incident, Sannex Auctioneers stopped Tuskys from opening its doors and is set to auction the retailer’s stocks next Tuesday.
The auction and closure of the store indicate deep cash flow troubles at the former giant retailer, which revealed it owes suppliers Sh6.2 billion and is seeking to sell a majority stake in a rescue attempt.
“They owe the landlord over Sh30 million in rent arrears. The money has been pending for a long duration,” said a representative from Sannex Auctioneers in an interview yesterday.
The auctioneer has already issued a notice on Tuskys goods that will be sold on September 22, including electronics, assorted clothes and handbags, freezers, trolleys, phones among other items.
“We closed the shop today in the morning and we are set to sell by public auction their goods to raise the outstanding amount in dispute,” said the source.
The closure of the Greenspan Mall branch comes barely a few weeks after auctioneers temporarily closed a Tuskys store at Kisumu’s United Mall over Sh26 million rent arrears.
The branch was however opened a day later after the retailer paid Sh15 million and promised to clear the balance.
The landlord, United Miller, then terminated the lease a day later over the Sh26 billion dispute. Tuskys has been given up to February 2021 to find a new location.
The retailers Eldoret branch was also closed last month by Chargless Auctioneers Limited over non-payment of rent amounting to Sh14 million.
The branch was however opened after the retailer deposited Sh5.5 million with the auctioneer, promising to clear the balance in the next few days.
The closure of the branches is an indicator of deep cash flow troubles at the giant retailer, which owes suppliers at least Sh6.2 billion.
In a race to prevent collapse, Tuskys is seeking to sell majority stake to a consortium made up of a private equity firm and an undisclosed foreign retailer.
The struggling retailer is set to raise Sh2 billion short-term debt from an unnamed private equity firm based in Mauritius, with the funds aimed at stabilising operations to make it more attractive to strategic investors it is courting.
Raising debt capital will ease the retailer’s financial pressure, giving it more time to negotiate the sale of a majority stake in a transaction that could delay by six months or more.
Tuskys earlier estimated it needed at least Sh2 billion to survive in the short-term as piling debt led to supplier defections, stock-outs and closure of some stores.