Nakumatt Kagugu Supermarket in Kigali, Rwanda. PHOTO | FILE | NMG
Summary
- The court appointed Kayiranga Sebakara Gaspard as the provisional administrator.
- The Nyarugenge Commercial Court has ordered all creditors of Nakumatt to proceed with registering their claims with the provisional administrator.
- Nakumatt Rwanda’s woes follow those of sister companies in the region and especially in Kenya.
Nakumatt Rwanda has been put under provisional administration
following several months of cash flow difficulties that threatened the
supermarket’s loan repayment capacity.
The Nyarugenge
Commercial Court delivered its verdict on April 10, in an application
filed by Nakumatt's board of directors. The court appointed Kayiranga
Sebakara Gaspard as the provisional administrator, a development that
comes just months after received accolades from the taxman.
“The
court orders the current management of Nakumatt Rwanda Ltd to hand over
all company books to the provisional administrator, to provide him with
all necessary information and assist him in implementation of this
order,” reads the court decision.
It ordered all creditors of Nakumatt to proceed with registering their claims with the provisional administrator.
The
provisional administrator will be reporting to the court and the
registrar general of companies on the plan to rescue the company every
three months.
Atulkumar Maganlal Shah, a director who filed the request on behalf of the board of directors said: “Nakumatt can no longer pay for its due debts and it appears that it will not be able to pay its other outstanding debts as they fall due.”
Atulkumar Maganlal Shah, a director who filed the request on behalf of the board of directors said: “Nakumatt can no longer pay for its due debts and it appears that it will not be able to pay its other outstanding debts as they fall due.”
Application for insolvency
The
applicant submitted to the court that the application for insolvency
was suggested by a board meeting of January 8, after analysing the audit
reports of two financial year — 2015 and 2016.” The report indicated
that the company was experiencing cash flow problems.
The case was filed on January 8, and was first heard on March 21 and a second hearing was held on April 3.
In
their application, Nakumatt’s board listed only two creditors —
Hotpoint Rwanda Ltd, a distributor and sellers of electronic appliances
and Shoppers Distributors Ltd with claim of Rwf 167.4 million ($193,347)
and Rwf19. 1 million ($22,060) respectively.
The list
of creditors sparked outcry from other companies, among them I&M
Bank Rwanda Ltd, which claimed it is owed Rwf1 billion ($1.1 million).
Loan deal
“I&M
Bank was surprised to hear that Nakumatt filed for insolvency, only
four days after signing a loan agreement of more than a billion,”
Rubasha Herbert, I&M Bank’s lawyer.
The loan,
according to papers submitted to the court by I&M Bank, include an
overdraft limit of Rwf500 million ($577,500), restructured stock loan of
Rwf417 million ($481,635) and another loan facility of Rwf59 million
($68,145).
Mr Rubasha said Nakumatt no longer channels
its payment through I&M bank and the bank raised the matter but the
bank is yet to get a response.
He further requested the court to order Nakumatt to resume channelling its payment through I&M Bank.
Other
Voluntary Intervening Parties include two coffer suppliers, Pearl
Enterprise Ltd and COOPAC Ltd, who presented Rwf20 million ($23,100) and
Rwf14 million ($16,170) unpaid invoices respectively.
Nakumatt’s
current assets are valued at more than Rwf2 billion ($2.3 miilion),
Jean Claude Kabera, Nakumatt’s lawyer, told the court.
Financial difficulties
According to the pleadings, the supermarket started experiencing financial difficulties in 2015.
“In 2015, the company made a loss of Rwf 152.99 million and in 2016 the loss went up to Rwf 554.83 million,” the pleadings read.
Nakumatt Rwanda’s woes follow those of sister companies in the region and especially the Mother company in Kenya.
The supermarket started operations in 2008. It has two shareholders — Nakumatt Holdings Ltd and Atulkumar.
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