CAPITAL INJECTION

Relief for Tuskys as part of Sh2bn funding hits account

The disbursed first tranche of Sh500m to cover immediate working capital requirements

In Summary

• In addition, Tuskys has also settled August arrears for suppliers on its online custodial trading platform. 

• The suppliers' old debt amounting to Sh321 million has been settled, management notes.

Tuskys Supermarket
Tuskys Supermarket

Struggling retailer-Tuskys has received the first tranche of the Sh2 billion capital injection from an undisclosed Mauritius-based fund, giving hope to the cash-strapped family business.

This, even as the retailer remains under pressure to clear supplier debt and pay salary arrears to its staff, amid an exit by some of its managers.

Chief Executive Dan Githua says the disbursed first tranche of Sh500 million will cover immediate working capital requirements including partial settlements to staff, suppliers and landlords among others.

 

“Having received the funds, we are actively releasing due payments to landlords, staff, and suppliers. In particular, the first tranche of the suppliers' old debt amounting to Sh321 million has been settled,” Githua said in a statement on Friday evening.

In addition, Tuskys has also settled August arrears for suppliers on its online custodial trading platform.

The portal with more than 280 suppliers has continued to enjoy immense support with a more than Sh1.8 billion turnover barely eight weeks into its launch.

“We remain committed to ensuring that we progressively continue to meet our liabilities and restore our shopping experience. We wish to thank our suppliers and stakeholders for their continued support,” Githua said.

Tuskys has partly blamed its financial troubles and efforts to bounce back, on effects Covid-19 on its business, including containment measures by the government such as curfew.

Reduced disposable income in households, social distancing and stay or work from home measures have also cut activities at malls, affected retail businesses across the country.

Tuskys is however confident it will regain its footing, banking on among others, the new restocking deal with suppliers, to replenish its stores.

 

The new deal gives suppliers access to a portal, giving them visibility of their supplies and sales from each store, head of business development John Muitiriri said.

The retailer has in the past several months been forced to close some branches on reduced cash flow.

The closed branches include Tuskys Tom Mboya, Tuskys Kitale Mega and its Digo Road branch in Mombasa.

Other outlets which faced closure, include its Eldoret store, Nairobi’s Komarock Mall store and Kisumu's-United Mall branch.

The new supply deal is expected to increase transparency and accountability as the retailer moves to win back its suppliers' trust.