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{
"id": 244149,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/244149/?format=api",
"text_counter": 189,
"type": "speech",
"speaker_name": "Dr. Kituyi",
"speaker_title": "The Minister for Trade and Industry",
"speaker": {
"id": 293,
"legal_name": "Mukhisa Kituyi",
"slug": "mukhisa-kituyi"
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"content": " Mr. Deputy Speaker, Sir, on Tuesday, last week, I promised this House that I would come back with a comprehensive Ministerial Statement on the state of play in our attempts to revive Uchumi Supermarkets Limited. Rather than give detailed accounts of reasons why we want to do this and the benefits of doing it, which I believe I did in my previous Ministerial Statement on the supermarket chain, this afternoon, I wish to do two things: First, I will give an account as to why our initial optimism to re- open the supermarket chain within a week did not materialise and, secondly, inform this House of the current status and where we are headed. Mr. Deputy Speaker, Sir, at its last meeting, the Cabinet approved the revival of Uchumi Supermarkets, subject to a rescue plan that is acceptable to Government. On the basis of that approval, myself and my colleague at Treasury, together with the members of the Rescue Task Force, consulted on the development of a draft rescue plan. After the approval of this rescue plan by His Excellency the President on 21st June, we sent the same to the other stakeholders. Principally, the secured creditors, the suppliers, the landlords, the workers and former shareholders of Uchumi Supermarket Limited. This process turned out much more protracted than I had originally expected. Among other things, while we have a shared sense of the need to revive Uchumi Supermarkets Limited, we have fairly recent memories of what happened to Kenya Farmers Association; that, once a company is in trouble, and Government injects in some money, all manner of creditors to that company rush to put their hand on the money that arrives first. So, it was important for us, on the basis of the rescue plan, to develop an enforceable legal instrument; a framework agreement, on the basis of which all the interested parties will commit themselves, that once we agree on the priority use of the earliest resources available, they should not push to the front of the queue to try to liquidate their interests. Mr. Deputy Speaker, Sir, while many of them fully welcomed this, there were still some issues that the task force had to deal with. Beyond the re-capitalisation and the revival of Uchumi Supermarkets Limited, most of the stakeholders of the company had insisted that they want a management that leads to a viable private sector-driven Uchumi Supermarkets Limited of the future. For this reason, the process of recruiting a new management had to be much more inclusive than interviews of the task force. So, we asked for the establishment of an interviewing panel with representatives from the creditors, suppliers and the former management, to sit together with the representatives of 1902 PARLIAMENTARY DEBATES July 6, 2006 Government and shortlist the people who were interested in management positions and interview them. This was concluded fairly well last week but when the names were proposed to the creditors, who are the employers of the receiver manager, who have a veto on any interim management of company trading under receivership, they wanted to do their own due diligence, and that slowed us down. They even suggested certain changes in the rankings and the priorities of persons to be employed. Mr. Deputy Speaker, Sir, I am glad to inform this House that, at long last, this afternoon, we got the concurrence of all the stakeholders - the creditors, the suppliers and the task force - on the team of persons to become the interim managers of Uchumi Supermarkets Limited. Secondly, we have succeeded in getting all the suppliers to agree on the schedule of prepayment of small creditors and more importantly, on how to use the resources that come as trading capital, and payment of pending bills. Number three and perhaps the most difficult one, we have had to deal with rather strange questions. Some of the sensitive issues negotiated with suppliers and creditors under which concessions have been paid, where there was treatment of indemnity and counter-indemnity, the flow of Government funds and shareholder funds in the rescue plan, resolving these matters required very protracted negotiations which ended at 3.00 p.m, this afternoon. Mr. Deputy Speaker, Sir, I am glad to inform this House that on the last of the most contentious issues, this afternoon, we finished the concurrence of the principal creditors and we have entered a framework agreement between the task force and the Government on one side, and the creditors on the other. So, on the basis of that, members of the task force have just completed inspecting the Uchumi Stores, to ascertain the stock levels and practicality of reopening. I have said the gates will reopen. But, I thought, with your concurrence, that if we appoint managers--- I could have given their names here but some of them have not been informed officially. Unlike in the past, I would rather people were informed of their appointments before putting the issue in the public domain. So, tomorrow, we will announce the names of the interim management team and I want them to be involved so that jointly, with the new management team, creditors and suppliers, we will announce the exact date on which Uchumi will reopen. Mr. Deputy Speaker, Sir, I want to restate that our intention is not to return Uchumi to Government control. The Government, as a custodian of Government interests, believes that the best way to privatise Uchumi is as a going concern. We are working with old stakeholders to have it operational and look for a strategic partner to get in and retreat from equity participation."
}