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Coolers firm demands Sh67m from Uchumi

Financially troubled Uchumi Supermarkets is facing a fresh claim from Euromart Limited, a supplier of refrigerators, which is demanding payment for coolers installed in seven of the retailer’s branches in Nairobi, Naivasha and Limuru.

Euromart is claiming Sh67 million from Uchumi, arguing that it is yet to receive a single cent from the retailer since delivering the refrigerators and other equipment between November 2014 and March 2015.

The firm says it has written to Uchumi several times seeking payment of the debt but that the retailer has not made any payments. It is now seeking a court order compelling Uchumi to settle all arrears. The firm says meetings with Uchumi managers have only elicited empty promises on payment.

Uchumi in its defence has denied that it owes Sh67 million to Euromart, and has asked Justice Fred Ochieng to dismiss the suit.

Uchumi last year survived a court petition to wind it up after several creditors held that it owed them close to Sh300 million. The creditors withdrew the petition after agreeing to a payment plan with the retailer.

Close to 170 suppliers agreed to resume furnishing its shelves with goods under an arrangement that gives them control over how they get paid. The retailer has written cheques worth more than Sh250 million since striking the deal on repayment with suppliers.

Under the arrangement, Uchumi gets 20 per cent of the revenues to pay rent, rates and staff costs and make a profit while the suppliers get 80 per cent of the cash.

READ: Uchumi share price falls as it sinks Sh2bn deeper in the red

The retailer and Euromart yesterday agreed to adjourn the suit for 30 days to allow them to reconcile figures before returning to court to battle it out. Mr Justice Ochieng allowed the adjournment, and ordered the parties to return to court on March 6 for a mention and further directions.

Euromart says it supplied refrigerators to Uchumi’s Naivasha branch (Sh26 million), Limuru branch (Sh8.4 million), Lang’ata Road branch (Sh1.9 million), Ngong Hyper (Sh5.1 million), Kenyatta University Uni City branch (Sh25 million), Sarit Centre and Aga Khan Walk branches (Sh910,000).

“On November 19, 2014 Uchumi issues a local purchase order for the supply of refrigeration and other equipment worth Sh26 million to their Naivasha branch.

“More similar purchase orders addressed to us were issued by Uchumi on diverse dates of 2014 and 2015 for the supply of goods and we delivered the goods promptly to them as per their specifications.”

“Uchumi through its agents has since neglected and/or refused to pay the outstanding debt owed to our company, amounting to a breach of the contract.

“We made many visits to Uchumi trying to get them to pay the money owed to us, but all was in vain,” says Euromart in court documents.

Euromart adds that Uchumi placed the orders with exact specifications for the iceboxes, and that it delivered them as per set deadlines.

The firm holds that Uchumi’s failure to pay the Sh67.5 million debt has stifled its business operations, and wants the court to order the retailer to immediately clear all arrears.

Uchumi denies that it has refused to settle the debt but has questioned how Euromart arrived at the figure.

Euromart now says that the retailer’s defence statement only contains denials without proper explanations, and has asked the judge to strike it out of the court record.

bwasuna@ke.nationmedia.com

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