Debts force Metro to close down
Nov 28, 2007
MARKET INTELLIGENCE<br><br>METRO Cash and Carry supermarket, recently forced to close down due to bankruptcy, has left a debt of sh9.8b, the liquidator said.
MARKET INTELLIGENCE
By David Muwanga
METRO Cash and Carry supermarket, recently forced to close down due to bankruptcy, has left a debt of sh9.8b, the liquidator said.
Sh4.8b debt was supposed to be paid towards trade creditors, staff terminal benefits, taxes, the National Social Security Fund contributions, sundry and suppliers, Nagawa Luggya, said in a report dated October 30.
The remaining sh5b was owed to Metcash Investment Holdings, a Metro shareholder.
Metro was the first and largest supermarket in the city. It had branches in Kenya and Uganda, both of which have been shut down.
“Metro used the money that was supposed to pay local suppliers to pay Kenyan suppliers after they took legal action against the supermarket,†one of the local suppliers, who declined to be named, claimed.
He alleged that an international audit firm gave unqualified opinions on the company’s financial statements even when the company was going into liquidation.
The former supplier said the company’s headquarters in South Africa were planning to pay only 20% of the money they demanded.
“We are protesting against this. We want the Government to help us get our full pay for the supplies.
“We shall take legal action against Metro,†he said. Luggya said the possible causes of the company’s failure were the heavy debt burden since its incorporation. Records show the company has been indebted to financial institutions including Stanbic Bank whose debt was settled in 2006 and Barclays Bank whose debt stands at sh3.6b
“The large debt burden remained outstanding because no efforts were
“The liquidity problem was so critical that Metro had to take out loans from its members like Metcash Investment Holdings,†she added.
Luggya said the liquidation that started on August 30 ended on September 4, while stock-taking was completed on October 19.
“With the exception of the store at Lugogo, all stores were in rented premises.
“Rent and utilities for September are unpaid. When the landlords learnt about the closure, they attached the stocks as security for unpaid rent and utilities,†she explained.
“The situation got so bad that at the Kibuye store, before we could take out fridges, the landlord changed padlocks and has opened a new supermarket.
“In in Masaka, we had to employ Police officers,†Luggya added.
By David Muwanga
METRO Cash and Carry supermarket, recently forced to close down due to bankruptcy, has left a debt of sh9.8b, the liquidator said.
Sh4.8b debt was supposed to be paid towards trade creditors, staff terminal benefits, taxes, the National Social Security Fund contributions, sundry and suppliers, Nagawa Luggya, said in a report dated October 30.
The remaining sh5b was owed to Metcash Investment Holdings, a Metro shareholder.
Metro was the first and largest supermarket in the city. It had branches in Kenya and Uganda, both of which have been shut down.
“Metro used the money that was supposed to pay local suppliers to pay Kenyan suppliers after they took legal action against the supermarket,†one of the local suppliers, who declined to be named, claimed.
He alleged that an international audit firm gave unqualified opinions on the company’s financial statements even when the company was going into liquidation.
The former supplier said the company’s headquarters in South Africa were planning to pay only 20% of the money they demanded.
“We are protesting against this. We want the Government to help us get our full pay for the supplies.
“We shall take legal action against Metro,†he said. Luggya said the possible causes of the company’s failure were the heavy debt burden since its incorporation. Records show the company has been indebted to financial institutions including Stanbic Bank whose debt was settled in 2006 and Barclays Bank whose debt stands at sh3.6b
“The large debt burden remained outstanding because no efforts were
“The liquidity problem was so critical that Metro had to take out loans from its members like Metcash Investment Holdings,†she added.
Luggya said the liquidation that started on August 30 ended on September 4, while stock-taking was completed on October 19.
“With the exception of the store at Lugogo, all stores were in rented premises.
“Rent and utilities for September are unpaid. When the landlords learnt about the closure, they attached the stocks as security for unpaid rent and utilities,†she explained.
“The situation got so bad that at the Kibuye store, before we could take out fridges, the landlord changed padlocks and has opened a new supermarket.
“In in Masaka, we had to employ Police officers,†Luggya added.