Family row threatens Tuskys IPO plan
Tuskys Supermarkets chain has long set its sights on IPO. The retail chain is one of the two dozen firms on the NSE’s Ibuka programme that grooms IPO prospects. Tuskys is a family-run supermarket company with operations in Kenya and Uganda. In addition to its namesake supermarket outlets, it also runs a fashion retail business under Mavazi brand.
Tuskys needs to bring on board a cornerstone investor first before it can go public. The Joram Kamau family-owned retail chain is currently in talks with outside investors about inject cash into the business. The investment talks centre on the family selling a majority stake in Tuskys.
But Yusuf Mugwer, a member of the Joram Kamau family who owns 17.5% stake in Tuskys, has balked at the idea of bringing outside investors into the business before longstanding disputes over the running of Tuskys chain and missing funds are resolved.
Yusuf Mugwer has long accused his siblings who run Tuskys of mismanaging the retail chain. For example, he has taken his siblings to court for allegedly failing to account for more Ksh1.6 billion missing from the business. The Joram Kamau family feud threatens to delay the closing of an investment deal needed to both shore up Tuskys’ liquidity and clear its IPO path.
Delays in closing an investment deal also threatens Tuskys’ survival. The coronavirus pandemic has driven Tuskys into a financial crisis, resulting in delays in the payment of supplier dues. Consequently, the antitrust regulator has hit the supermarket chain with several restrictions.
Moreover, the chain has shut some of its outlets and sought to shrink its workforce in a bid to cope during this pandemic. The situation has necessitated efforts to seek outside investors to pump more cash into the business.