Tuskys discloses Ksh.2.8 billion Equity, DTB debt
Tuskys will be at task to repay Ksh.2.8 billion in credit extended to it by Equity Bank and Diamond Trust Bank (DTB) as it seeks to turn around its fortunes.
The outstanding debt to the pair of lenders has been disclosed by the retailer in projected financials presented as part of court filings in an ongoing wind up petition against it.
The majority of the outstanding debt, Ksh.2.5 billion is owned to DTB and relates to numerous facilities including a term loan, overdraft facility, letters of credit & guarantee, higher purchase facilities and insurance premium facilities (IPF).
Tuskys meanwhile has an outstanding Ksh.285.1 million US dollar denominated loan facility at Equity Bank.
The new filings reveals the extent of Tuskys debts owned to its trade partners and adds to an already revealed Ksh.6.2 billion in supplier debts.
The supermarkets present debt exposure stands at Ksh.3.1 billion, a sum total that includes Ksh.349.1 million in outstanding rent work-lease facilities.
According to the projected financials running to February 2022, Tuskys has anchored it short-term survival on balances from the disbursement of a Ksh.2.1 billion dollar denominated loan facility from a Mauritius based private fund.
Having already received a partly Ksh.500.9 million tranche, Tuskys is backing the lump some from the balance along with the disposal of old stocks and the sale of non-strategic assets to save it from the jaws of liquidation.
Projected cash inflows for the month of October have been set at a high Ksh.1.3 trillion before settling over the short-term to between Ksh.500 and Ksh.600 million in the run up to 2022.
Outstanding bank debt is expected to reduce to Ksh.2.3 billion by February 2022 with Tuskys hinting at a pursuit for a freeze on DTB’s overdraft facility and letter of guarantee which puts a freeze to the payment of a combined Ksh.600.8 million.
Tuskys will in the meantime face steady cash outflows from its payment of old debt, interest repayments and other current arrears which will see it retain negative earnings in the next 13 months.
The retailers’ earnings before interest, tax, depreciation and amortization (EBITDA) are expected to only turn positive in December of 2021.
Big court date
The projected financials are nevertheless depended on crucial court directions from Tuskys ongoing wind up suits.
Tuskys faces two co-current insolvency petitions from Hot Points Appliances Limited and Syndicate Agencies Limited.
The latter has claimed Ksh.30.9 million from the retailer as compensation for the provision of loss control services between November 2017 and May this year, a sum it says Tuskys has been unable to clear.
Additionally, Tuskys has been haunted down by other creditors including landlords who have kept the auctioneer’s hammer hanging above its head.
The supermarket however earned reprieve last week as High Court mooted the sporadic auctions pending the determination of the wind up suits.
On Tuesday, the High Court is expected to give new directions on the liquidation case in a ruling which will effectively rubber stamp Tuskys near term future.
Company Voluntary Agreement
Tuskys has resorted to renegotiating its outstanding arrears with its creditors while making arrangements to clear the balances at later days.
According to court filings, the retailer has held a series of meetings with its suppliers in recent months on the settlement of old debt.
At the same time, Tuskys has established a new custodial account to cater for current supplier payments.
To save its skin, the retailer has the option to opt for a company voluntary agreement (CVA) like Uchumi Supermarkets which would in effect stabilize its operations as its creditors stretch out repayments easing pressure on the retailer.
Subsequent inabilities to meet scheduled repayments would however see Tuskys fall into administration kicking off a possible wind up process as was the case with the now defunct Nakumatt.