Uchumi Supermarkets Plc has received a boost in its recovery efforts after the High Court's Commercial Division approved the Company’s Voluntary Arrangement.
The CVA was adopted at the creditors' meeting on March 2.
The High Court’s ruling delivered on July 1 gives Uchumi the go-ahead to implement the CVA enabling the retailer offset some debt, pay off part of the remainder in phases and write off a portion of payables.
The payment plan will be implemented over a number of years, according to the CVA filed in Court.
“The decision gives us a chance to implement our recovery plan. We are also aware of the challenges in the retail sector that has worsened by the Covid-19 pandemic but management is engaging with all stakeholders with a view to supporting the industry,” Uchumi Supermarkets Plc CEO Mohamed Mohamed said in a statement.
He said the retailer continues to search for strategic partners and other potential investors.
The CVA will be subject to a periodic review through a creditors’ meeting every six months when creditors and other stakeholders will appraise implementation of the CVA and the financial well-being of the retailer.
As part of the CVA, Uchumi will look into new business models including but not limited to implementing digital strategies, moving into the convenience store model and adopting cost leadership strategies.
Owen Koimburi, the legally appointed insolvency practitioner, will implement the CVA.
(Edited by V. Graham)