Uchumi Supermarkets Faces New Legal Challenges in Recovery Efforts
Uchumi Supermarkets, a once-thriving retail chain in Kenya, is encountering fresh obstacles in its ongoing recovery efforts. A long-standing legal dispute over its 17-acre Kasarani property has created uncertainty around the company’s Company Voluntary Arrangement (CVA), which was designed to help it manage its debts through asset sales and operational improvements.
The CVA, approved by creditors, aimed to provide a structured repayment plan for the supermarket chain. However, recent developments have cast doubt on its viability. An adverse High Court ruling has stalled the sale of the disputed property, which is central to Uchumi’s strategy for repaying its debts.
In the quarterly report for the period ending September 30, 2025, FCPA Owen Koimburi, the Monitor for Uchumi, highlighted the challenges posed by the court decision. He stated that the CVA is now under threat due to the legal uncertainty surrounding the property. The report notes that “there exists a material uncertainty from delayed timelines arising from both litigation outcomes and the Court of Appeal.”
If the appeal fails, the CVA could become unviable unless there is a new capital injection or an alternative plan is developed. The case, currently before the Court of Appeal under reference E455 of 2025, remains critical to Uchumi’s revival. The Monitor confirmed that a Senior Counsel has been appointed to lead the appeal, which may eventually move to the Supreme Court if constitutional issues are raised.
At the last creditors’ meeting held on March 17, 2025, creditors made several key decisions. They resolved that “the lifetime of the CVA shall coincide with the sale, distribution of proceeds from the sale of KML 17-acre property and a meeting of the creditors to resolve its determination.” Additionally, they agreed that “the management should pay creditors with any surplus cashflows that could be generated from the business (subject to the Board and Monitor’s approval).”
The Monitor’s report also indicates that 95 percent of planned creditor payments have been made. This includes full settlement of bank loans and legal fees, although payments to trade creditors and staff arrears are still ongoing.
Despite these progressions, Uchumi’s plans for redevelopment face another setback. The company had intended to transform its Lang’ata Hyper property into a mall. However, this initiative has encountered a problem: a tenant refused to vacate the premises despite a lease termination in June 2023. This issue has delayed the project and added further complexity to Uchumi’s recovery strategy.
The ongoing legal battles and operational challenges highlight the difficulties Uchumi faces as it attempts to rebuild its business. While some progress has been made, the future of the CVA and the company’s overall recovery remain uncertain. Creditors and stakeholders are closely watching the outcome of the court cases, as they will play a crucial role in determining the next steps for Uchumi Supermarkets.