Tuskys supermarket has backed out of a proposed deal with rival Nakumatt in a move that could have slowed the collapsed of the troubled retailer.
The proposed partnership between the two has been suspended, correspondence between the Competition Authority of Kenya, Tuskys and one of its shareholders shows.
The latest development has left Nakumatt’s revival plans in limbo as it will erode creditors’ faith in resuscitating the retailer.
Read : Tuskys sibling opposes fresh proposal for Nakumatt merger
Nakumatt is struggling with a Sh35.8 billion debt.
The CAK yesterday wrote to Tuskys shareholder Yusuf Mugweru saying one of the parties has requested that the deal be suspended.
Mugweru had opposed the partnership plans.
Tuskys has grown cold feet because aspects of the revival proposal presented by Nakumatt administrator Peter Kahi. ”As a result, we are instructed to advise you that Tusker Mattresses Limited is re-considering its proposed investment in Nakumatt Holdings Limited.
We request you to kindly suspend any further action on the exemption process,” Tuskys said in a letter dated March 28.
In January, Nakumatt and Tuskys filed an application for exemption of a management contract that would see the latter off er management services to its rival.
The deal would also allow Tuskys to issue recurring guarantees to suppliers and in return pocket one per cent of sales. Mugweru opposed the application,
saying Tuskys locked him out of the deal, yet his approval was needed.
CAK director Stellah Onyancha yesterday wrote to Mugwerur revealing the deal had collapsed.
“We would like to inform you that one of the parties to the exemption application has since instructed the authority to suspend analysis of the said
application,” Onyancha said in a letter to Mugweru’s lawyers Murgor & Murgor Advocates.
Onyancha said CAK may consider the exemption application if Tuskys revisits its position and lifts the suspension.
Attempts by the Star to get more details from CAK, Tuskys CEO Dan Githua, Kahi and Nakumatt founder Atul Shah were unsuccessful.
Githua’s phone went unanswered while Shah referred the Star to Kahi, since he no longer has authority to speak on behalf of Nakumatt.
Kahi said he was not aware of the suspension. As the administrator, Kahi is in charge of all Nakumatt aff airs.
The administrator in January appointed Tuskys to manage Nakumatt. Kahi proposed that the management deal continues until Nakumatt gets back on his feet in a revival plan.
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