Directors of troubled Regional retailer, and Kenya based Tuskys Supermarket have approved the sale of a majority stake to an equity investor, it announced on Tuesday.
The retailer runs about 60 outlets In Kenya and Uganda
The approval by shareholders settles concerns that a feud threatened the deal following a spilt among the siblings in the family-owned business.
In a statement, the Tusker Mattresses Limited Board of Directors said ongoing plans to recapitalise the business are on schedule.
Delayed payment to suppliers has left the retailer at loggerheads with its suppliers, evident with empty shelves in some sections of the retailers’ stores.
It is currently struggling to pay suppliers, facing stock-outs, and salary delays dating back to April.
The once mighty retail giant has already see drop in sales by more than 35 per cent (April-May).
The retailer is already struggling to meet it’s about KSh200 million monthly wage bill.
The once mighty retail giant is seeking to sell a majority stake to a consortium made up of a private equity firm and an undisclosed foreign retailer as part of efforts to raise cash to pay suppliers and resolve its financial troubles.
The statement said a board meeting held at the Ole Sereni Hotel on July 19, saw the seven shareholders approve efforts to get a strategic investor sourcing efforts, which is a crucial development and lifeline for the business.
The company is fully owned by the family of the TML Founder, the late Mzee Joram Kamau, through Orakam Holdings Ltd, a body corporate with a head office at the Karen Office Park.
“The Orakam Shareholders provided their nod to the acquisition of a majority stake in Tuskys by any equity investor who will further provide strategic leadership for the long- term growth of the business and for the benefit of all stakeholders,” chairman Bernard Kahianyu said.
He said the board together with a team of transaction advisors are evaluating various offers and hope to conclude the recapitalisation of the business in the shortest time possible.
As the strategic investment option proceeds, the management team has also been actively engaging business stakeholders with the board’s support, Kahianyu said.
The Suppliers have signed in on a short-term portal that will ring-fence their supplies and ensure timely payment for the same.
“This option provides a much-needed lifeline for the business and secures a win-win stability option,” said Kahianyu.