By Allan Olingo

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Tanzanian tycoon Yusuf Manji has been mentioned among the people likely to buy out Nakumatt Tanzania operations, even after it emerged that the retailer owes its suppliers more than $379.16 million, up from the previously reported $152.18 million.

Last year, Nakumatt wrote to Tanzania’s Fair Competition Commission seeking to offload 51 per cent of its stake to Ascent Investment Ltd, a move that would have seen it inject more capital into its business. FCC declined the request.

The EastAfrican understands that Mr Manji is in talks with the retailer at a time it is struggling to remain afloat, and has been closing branches in the country over the past two weeks.

“The talks have been going on over the past one year and we are hopeful that if successful, then Mr Manji through his firm Quality Group will buy out Nakumatt from Tanzania,” a source privy to the talks told The EastAfrican.

In December last year, Mr Manji, through his Quality Group Company, expressed interest in Nakumatt. If successful, he expects to use Nakumatt Tanzania to expand his market share and cement his holding firm’s presence in the country’s retail segment.

The EastAfrican also understands that Mr Manji has reached out to the French retail giant Carrefour for a possible partnership in the regional retail market. 

Last week, Tanzanian suppliers owed money by Nakumatt supermarket said that they were banking on the deal so as to get access to their funds.

“We are privy to ongoing talks between Mr Manji and Nakumatt owners over a possible takeover of the Tanzania operations and we are here to show our support; we remain optimistic the deal will sail through,” said the suppliers’ spokesperson Joseph Mlay.

Last Tuesday, the retailer’s landlord closed its Arusha branch, barely a week after one of its Dar es Salaam branches was shut down, with both owing $260,000 in rent arrears.

READ: Nakumatt in talks to reopen Mlimani mall outlet

Last month, Kenya asked Nakumatt and Uchumi to provide a detailed list of their debts by the end of this month so as to have a clear picture of the financial issues bedevilling them, and help the government chart a way forward.

“We have asked for this detailed debt analyses so that we can try and see what to do to help them out. We would like to see them flourish not just here in Kenya but across the region,” Kenya’s Trade Principal Secretary Dr Chris Kiptoo said while meeting his Tanzanian counterpart.

Kenyan support

Tanzania indicated that it would support the Kenyan government’s move on the two retailers, noting that it was important to safeguard the interests of the small and medium enterprises that are hurting as a result of the debt owed by the supermarket chain.

“It is important for Kenya to chip in and assist these firms, especially Nakumatt, in the repayment of their debts so that things can get back to normal.

Already, we have calculated that Nakumatt owes its suppliers in our country $704,881, It may seem like a small amount compared with its debt in other countries but since the suppliers are largely small scale producers, the debt means a lot to them,” said the Permanent Secretary in Tanzania’s Ministry of Industry, Trade And Investment Prof Adolf Mkenda.

The negotiations with Mr Manji indicate that its equity stake sale to Ascent group fell through, leaving Nakumatt with more debt.

Ascent, formed by former Centum executive David Owino, Australian investment banker Guy Brennan and former Nokia executive Lucas Kranck, in its investment criteria had indicated that it would be seeking to invest up to $10 million in regional firms that need both financing and expertise to grow substantially.

In February, it was claimed in court documents that the billionaire businessman owns 99 per cent of telecoms company Tigo. This was after a law firm Brick House Law Associates sought to stop the planned sale of Tigo shares on the Dar es Salaam Stock Exchange on the grounds that Golden Globe International Services, which Mr Manji owns, is the majority shareholder of MIC Tanzania Ltd with 34,479 shares of 34,480 shares.

MIC Tanzania Ltd trades in Tanzania as Tigo, the second largest cellular company after Vodacom. Golden Globe's ownership of MIC Tanzania is being contested in court by Millicom which says Tigo is fully owned by Millicom Tanzania NV and Mr Manji has not acquired any shares in the company.

Mr Manji, through his Quality group of companies has expansive investments in real estate, the auto industry, logistic solutions and warehousing, food processing and engineering.

Last week, Nakumatt’s lawyer Paul Kamau while meeting with suppliers and creditors in an insolvency meeting convened by the court said that the retailer owed about $379.16 million to its suppliers and creditors, even as it emerged that it had since persuaded some of its key creditors to go along its new buyout plan with its competitor Tuskys.

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