Tuskys pays Sh2.8b debt, seeks strategic investors
Supermarket chain Tuskys paid suppliers in June as it raced to beat a regulatory deadline to settle its obligations that had remained outstanding for months.

This is after the Competition Authority of Kenya started looking into Tuskys’ operations in April after reports emerged that it was not paying suppliers on time as provided for in their respective contracts.

The CAK ordered Tuskys to settle supplier debt of Sh1.2 billion by Thursday last week after a group of companies complained to the regulator about the retailer’s default.
This comes on the back of a CAK investigation on abuse of buyer power since April, targeting retailers who delayed payments to local suppliers beyond the 90 day period prescribed by law.

Tuskys has provided documents indicating that it made payments to suppliers amounting to Sh2.77 billion in June 2020 as per the Authority’s order

Measures that helped the company pay the debt included negotiations for moratoriums and extensions of credit facilities with lenders.

Tuskys became the first major retailer to face the scrutiny of CAK’s Buyer Power Department that was created after former supermarket giant Nakumatt Holdings went under with Sh18.5 billion of supplier debt.

Nakumatt’s total liabilities amounted to Sh35.8 billion including bank loans (Sh6.9 billion) and commercial paper (Sh4.7 billion).

Besides the Sh884.3 million supplier debt admitted by Tuskys, the regulator also discovered that the retailer owed an additional Sh400.9 million through an independent investigation.

Milk processor New KCC is among the companies that stopped supplying Tuskys owing to the pileup of unpaid debt, causing stockouts of essential items on the retailer’s shelves.

CAK says Tuskys has presented a new plan to settle the remaining supplier debt over the next four months

Onlinecash