Even if BBK only allowed 1bn max loan/OD... I am surprised that other banks (KCB,SCBK,Citibank,etc) didnt step in coz these are also large banks with lots of large clients... I am not even counting some of the smaller mid-tier banks like NIC,DTBK,I&M,Imperial,Prime.... who would be good for a 100-250 million each.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB

Intell-tx for the confirmation. The more I read about Nakumatt,the more its finances don't pass the reality test.

Ksh1bn seems like a large exposure for one bank in Kenya. Not sure why Nakumatt didn't try to do a syndicated loan or even get smaller loans from several banks...


www.mjengakenya.blogspot.com

@VVS,you say a buddy involved in supplying FMCG told me they dont get paid for 30-90 days and there's nothing wrong if that's within the terms they agreed with the chain. But if they don't pay the supplier after the agreed period iko sida,and such failure often indicates a working capital crunch in a company - because where did the co. channel his money? Elsewhere. Such as in an expansion project of the co.,to pay off bank debts,to pay off other more pressing creditors who threatening the co. with legal/ bankruptcy proceedings,etc.

Working capital for acompany is tied up when a company buys lots of stock (worse if such stock is slow-moving or even obsolete),and may then also sell lots of it on credit. Such a co. will have very little cash left for day-to-day operations like salaries and wages,fuel for pool cars,re-stocking,etc as it has to wait for this slow stock to be bought and/or debtors to pay up so that it can in turn pay off its debts

Imagine if such a company was also building another branch elsewhere at the same time and was funding this organically i.e relying on the funds from shareholders and operations i.e the very cash tied up is stocks and debtors?! If it still insists on proceeding with building the branch,then little or no cash wil be left for operations meaning there's no cash to pay your buddy and other suppliers. The cash in the till at westgate,prestige,etc may look colossal to the average shopper but when you look at it relative to the demands of the business at that time,it really is mere pittance. Meaning the Co. has to borrow from banks. If the Co. builds yet another branch,the working capital crunch is exarcebated - meaning it has to borrow even more! But banks will refuse to lend if you have so much debt (highly geared/leveraged/over-extended) and in any case you will have mortgaged all your properties - you have reached your boroiwng limit. Since the co. needs more cash,it has no choice but to go to either the capital market (IPO),or seek a strategic investor. This is probably what happened.



..there's nothing,absolutely nothing really,that I can't do if I put my mind to it.

Due to the immediate prevailing economic climate in Kenya (or is it globally),retailers have seen decrease in demand for high value (high margin) stuff. Retailing is now back to 'dukawallah' basics - volumes.

Nakumatt plays at the sharp end of ABC1,but there was a great downward shift of purchasing power 2008/9 (re. usage & attitude survey,09). Coupled with other factors such as stricter anti-money laundering (wasn't me) and the somali pirate menace,financiers and some suppliers saw things heading south for NKMT. Charterhouse story is also quite some skeleton.

We are seeing a high noon for them. New investor might in turn spurn it to S.Africans who are looking into expansion to EAfrica.
Even without a 'for sale' sign at any of their doors,all major chains (Nakumatt,Tuskys,Ukwala and Naivas) have at least 1 unsolicited offer.
Retail sector in sub-sahara africa is very untapped,as one pundit put it,it is 'constantly ovulating'. Nakumatt braced the trail as among pioneers,and its time for another to make the real money.

Healthy eating = nutritious urine. Nyama choma anytime!

@Wa P - LOL... does someone want to buy my Uchumi shares??? No takeover plans??? I was lucky... I bailed except for 2-3 thousand shares... cant even remember...!

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB