The Competition Authority of Kenya (CAK) is holding the key to the planned Nakumatt Holdings Ltd and Tuskys Supermarkets merger.
Talks between the two major retailers are at an advanced stage and, having entered into a memorandum of understanding, they are awaiting approval from CAK in order to finalise the business arrangement between them.
Documents filed at the High Court in the insolvency petition against Nakumatt indicate that Tusker Mattresses Ltd (Tuskys) will be coming in as an investor.
Nakumatt is currently battling a suit filed against it by several creditors who are demanding over Sh4 billion, which it has been unable to pay, hence the insolvency petition.
The planned entry of Tuskys, if approved, may give Nakumatt a lifeline.
The giant retailer has had to close down many of its outlets because of inability to pay rent.
The other issues to be resolved upon authorisation by CAK relate to landlords, employees, suppliers and other creditors.
“Once the regulator reviews the agreement, then the investor will take over the management of the company and may reduce costs by closing down branches,” the document filed in court read.
There is currently an order stopping all Nakumatt creditors from attaching its property to recover dues.
The hearing resumes on Monday.