Choppies Still Owing Suppliers and Lenders Despite Kenyan Exit
Kevin Namunwa  |  Oct 14, 2020
       

Botswana retailer Choppies owed Kenyan banks and suppliers a total Ksh 1.2 billion during the time of its exit from the country. The troubled supermarket chain had tried to settle through inventory sales before its exit.

Choppies has revealed that the fire sale of assets last year realised Ksh 657 million. This, in turn, shrunk the value of its moveable assets from


This, in turn, shrunk the value of its moveable assets from Ksh 753 million in 2019 to Ksh 136 million as at June 30, 2020.

According to the Botswana retailer, local shareholders would take over 25% of the debt (Ksh 312 million). The Botswana owners have also committed to personally pay 72 million Botswana Pula (Ksh 681 million) if further Kenya debts materialise.

“All the stores except the equipment of one store were disposed of during the financial year, and the realised amounts have been used to settle the liabilities. Choppies Enterprises Kenya Limited and Choppies Distribution Kenya Limited closed with potential liability of (Sh1.2 billion) P132 million to which 25 percent of the amount will be borne by the local shareholders. The remaining formalities will be completed during 2021,” the company said.

The retailer had taken a loan of Ksh 300 million from Absa Bank Kenya. The loan was used to expand the retailer’s footprint that stood at 12 stores in Nairobi, six branches in Kisumu city and eight others across Kenya’s major towns before its unfortunate collapse.

Payment for the three-year bank loan at an interest rate of 12.7 percent was supposed to kick in August this year. The money was, however, secured by a corporate guarantee provided by Choppies Enterprises Limited and moveable assets.

Even after its exit, Choppies still has debts to pay. We witnessed the same with Nakumatt which is still battling lenders and suppliers over unpaid debts. Choppies and Nakumatt are among the several supermarket chain that have failed to hack the Kenyan market.