Credit - Shutterstock/patrice6000
The administrators of Deacons East Africa Plc said creditors approved plans to sell some of the Kenyan clothing retailer’s assets to reduce debt that piled up after an unsuccessful expansion programme.
Wednesday 23, January 2019
(Bloomberg)--The proposals, which include recruiting a strategic investor, “were voted for 100 per cent,” Peter Kahi, joint administrator with Atul Shah of PKF Consulting Ltd., said by email on Tuesday.
The company’s liabilities stood at KES 1.12 billion ($11 million) in November, according to a report presented to creditors. They include NIC Group Plc, a Nairobi-based lender that’s owed about KES 387 million.
Deacons, 14 per cent owned by Swedish development-finance institution Swedfund International AB, needs as much as 60 million shillings to improve liquidity and boost sales, according to the report.
The company with operations in Uganda and Rwanda was placed under administration in November after the loss of its biggest franchise, Mr. Price, a South African retailer. Resultant financial difficulties were exacerbated by heightened competition, the collapse of anchor tenants at Deacon’s key locations, and a failed expansion plan, according to the administrators.
Revenue dropped to about KES 646 million in the year through November, from KES 2.3 billion previously, PKF’s report showed. The company reported a loss of KES 628 million in the period and “may be unattractive to potential investors or buyers,” it said.
PKF plans to appoint a transaction adviser by the end of May to help identify strategic investors.