Nigerian bank moves to take over supermarket over N871.5bn debt after taking over Stallion Group

United Bank for Africa (UBA) in Kenya has been granted permission to auction a piece of land belonging to Uchuni Supermarkets on Langata Road, Kenya, over N871.5 billion (Ksh 162 million) debt.

A High Court gave the bank permission to sell the land after it emerged that the defunct supermarket and management had yet to pay the debt, three years after reaching a deal on the Company Voluntary Agreement (CVA).

UBA allowed the auction of a supermarket land

In 2022, UBA Kenya disclosed plans to auction the property after it emerged the government was moving to acquire the land compulsorily, stating that the bank should be paid first after the sale as it has the title to the property as a guarantee.

The bank, however, renewed plans to auction land and recover its money.

According to Justice Mabeya, three years into the CVA, the debtors have not made any payments, and there was nothing to reflect that non-core assets would be sold and the proceeds channeled towards paying creditors as agreed.

"Only beautiful promises that are made by the company (board). The company must be told that creditors do not live on empty, beautiful promises that are nothing but a bluff! Businesses and the economy are run on cogent and pragmatic proposals that are not only realizable but are practicable and real," the judge said.

The company opposed the application, stating that the matter had been dealt with in an earlier decision and the application dismissed.

Lawrence Ngao said the CVA was still valid and partly revised after meetings with the creditors.

He said UBA was taking 10% of the land, about N871 billion. There were contentions that the lender did not obtain the consent of other lenders, such as the government seeking about Sh1.2 billion and ICDC Limited (Sh116 million).

Ngao stated that the entire body of creditors had approved the revival of CVA in August this year.

He informed the court that the property is an essential income generator and the success of CVA depends on it, and the agreement proposes to repay the bank's loan in two years instead of recalling the amount immediately.

According to reports, UBA denied knowledge of the meeting as it was not invited to attend and did not recognize the revised CVA.