Dying Kenya based retailer Tuskys is seeking to sell a majority stake to a consortium made up of a private equity firm and an undisclosed foreign retailer, a transaction adviser and the Competition Authority of Kenya (CAK) has revealed.
The move is as part of efforts to raise cash to pay suppliers and win back their confidence, the retailer has already paid suppliers Sh2.7 billion in a bid to beat a regulatory deadline to settle its obligations that had remained outstanding for months.
Emulating top rival Naivas which recently raised more than Sh1.5 billion from a consortium of investors, including the International Finance Corporation (IFC) and private equity firm Amethis for expansion, Tuskys hopes the latest share deal will help put it back on its feet.
“The shareholders of Tuskys have communicated that they are also exploring other funding options, including seeking a strategic investor by July 31, 2020,” the CAK said in a statement.
The regulator also stated that should an investor apply to acquire a significant stake in the retailer, the review of such a filing will be fast tracked.
“The Authority took note of these initiatives and has thereof committed that, if the retailer opts to seek a strategic investor, the Authority shall within 14 days, and in accordance with the provisions of the Competition Act, consider and issue a determination upon submission of a merger/acquisition application,” the CAK said.
A director at Tuskys has also confirmed the discussions over sale of a majority stake, noting that they are at a delicate stage.
CAK has now stated that following engagements with theretailer, they were presented with a payment plan which will be honoured as agreed, thereby reducing the debt progressively as confirmed through compliance checks.
The authority has then called upon suppliers who have been aggrieved to present their case before CAK to enable them establish the Tuskys’ true debt portfolio.
“The Authority shall conduct compliance checks on a weekly basis to ensure adherence to the presented debt settlement plan,” the regulator said.
“Lastly, as the Authority continues to interrogate the financial statements, and management accounts made available by Tuskys, we call upon suppliers who may be aggrieved, and have not presented their matters to the CAK, to continue doing so. This will enable the Authority to establish Tuskys’ accurate debt portfolio.”
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