- The firm has outstanding debt worth Sh6.2 billion owed to suppliers and creditors.
- The announcement is coming just weeks after the notified the Competition Authority of Kenya (CAK) of intended capital injection
The struggling retailer, Tusker Mattresses Limited has signed terms of agreement with a Mauritius based fund for the provision of a financing facility worth Sh2 billion.
The firm has outstanding debt worth Sh6.2 billion owed to suppliers and creditors. Some have threatened to auction the retailer’s assets to recover unpaid dues.
In a statement Tuesday, the retailer’s board said the lifeline is expected to help alleviate the firm’s current capital constraints impacted by COVID-19 and further reposition the business for increasing stakeholders’ value.
‘’As previously communicated, we wish to reiterate our commitment to resolve the underlying working capital challenges quickly. This funding will provide the needed impetus to our overall capitalization journey,’’ Tuskys chairman Bernard Kahianyau said in a media statement.
He added that the board and management will engage all stakeholders in the coming days to agree on business modalities going forward.
The announcement is coming just weeks after the notified the Competition Authority of Kenya (CAK) of intended capital injection by a strategic investor.
Although details of the deal are yet to be made public, an internal source involved in regular meetings with angel investors told the Star that a deal of 100 per cent takeover is on the table.
''Tuskys will soon roar back to life. Local and foreign investors have expressed interest. Suppliers have been briefed on every development hence the confidence,’’ the source who pledged anonymity said.
The deal has been facing opposition from one of Tuskys directors Yusuf Mugweru who has vowed to block any takeover attempts because he has been excluded from talks with potential buyers, and is yet to see the company’s books of accounts for years.
In an interview with a local daily last week, he accused his brothers, who are also directors in the retailer that sprung from Nakuru of exclusion, saying that was the major problem facing Tusker Mattresses Limited
“And in typical fashion, they’ll confront him at the last moment and expect him to agree. Which of course he will not,” Yusuf said of the plans to bring onboard investors.
Speaking during the reopening of the Greenspan outlet, where a customer reward programme was also launched, Tuskys CEO Dan Githua termed the reward programme as a rebirth of Tuskys, saying that the retailer is on a recovery path with select branches now optimally stocked.
''The restocking has been undertaken in conjunction with leading suppliers who have committed to the retailer on a win-win basis to the tune of Sh1.2 billion,’’ Githua said.
Dubbed Tuskys Back-to-Back Sale, the promotion valued at Sh200 million is aimed at supporting loyal customers as the country battles the social-economic effects of Covid-19. On Friday, it relaunched its T-Mall branch.
The retailer has already put in place a system, which will stop it from directly handling suppliers’ cash.
Money paid at the till will be deposited in an escrow account, from where suppliers’ dues will be sent to them and the balance left to Tuskys.
In a letter, Githua told the competition regulator that the more than 100 suppliers have already signed up on the trading platform and intend to bring 90 per cent on board by end of this month.