The Kenya Defence Forces (KDF) will forcefully seize the 3.7 acres on which Uchumi Supermarkets’ Lang’ata store is located, bringing a new twist to the ownership of the prime land that is the subject of a court case.
On behalf of the KDF, the National Property Commission (NLC) is preparing documents to convert land and structures worth more than Sh500 million to military usage.
The KDF will be embroiled in a legal fight with UBA Bank over a Sh172 million loan that has gone into default. As the bank takes control of the building, the cash-strapped store is banking on the profits of the KDF sale to help it recover.
“For now, we cannot comment further on the value of compensation until we receive the award letters for compensation from the NLC. We are confident that the expeditious completion of the process will go a long way in implementing the turnaround strategy,” said Uchumi Supermarkets CEO Mohamed Ahmed Mohamed.
It is unknown why the KDF is interested in the site near to Wilson Airport, which the US administration has warned was vulnerable to terrorist attacks owing to insufficient security.
Wilson Airport handles around 90% of domestic flights, which mostly include of chartered and commercial flights to vacation locations like as Maasai Mara Game Reserve, Mombasa, Amboseli National Park, Lamu, Kilimanjaro, Diani, Lokichogio, and Nanyuki.
It is one of the busiest airports in East and Central Africa in terms of aircraft circulation. According to the supermarket, the High Court has halted the proposed sale as well as all pending debt collection lawsuits, outstanding loans, and rent claims against Uchumi in favour of a Company Voluntary Agreement (CVA).
The retailer and 121 suppliers were supposed to create a committee and agree on how to settle Sh4.2 billion owing to them and guarantee payments were delivered on schedule, according to the CVA.
This comes in the midst of UBA Bank’s quest to sell the Lang’ata Road property, which the store used as collateral for the loan.
According to the lender, Uchumi has been in default for over four years, and the unpaid debt is a source of worry for both the bank and its authorities due to the detrimental impact it has on depositors’ cash. The lender claims that auctioning the property is in the best interests of justice and fairness.
According to the CEO of Uchumi, the retailer is dedicated to the voluntary agreement, and the sale to KDF will provide the means to carry out the plan.
The sale to the military also marks a turn in relations after the KDF seized Uchumi supermarket Kasarani land.
NLC chairman Gershom Otachi said talks on the compulsory acquisition of the Uchumi property were ongoing. He declined to reveal the worth of the property and intended use by the military.
