The controversy surrounding President William Ruto’s 20 million shillings pledge to Jesus Winners Ministry has rekindled the fate of Uchumi Supermarkets Plc, once Kenya’s largest retail chain and a contributor to Kenya’s manufacturing sector, but is now comatose.
On Monday March 17, 2025 Uchumi Supermarkets is expected to update thousands of suppliers, employees, and other creditors on progress it has made in its Company Voluntary Agreement (CVA), the listed retailer’s blueprint for recovery.
Uchumi’s woes have been brought to the limelight after President William Ruto ordered the Kenya Defence Forces (KDF) to give Jesus Winners Ministry access to three acres of land the soldiers have occupied since 2018, land that the church bought for 450 million shillings from Uchumi Supermarkets.
Does this relationship between the soldiers, the Church, and Uchumi sound complicated? It is.
In this 4-Part series we will break down the story of how Uchumi ended up selling three acres of land to the Roysambu-based church that is led by Pastor Edwin Mwai, a well-connected preacher who is sought by politicians across the divide, and what lies ahead.
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Part 1: Distress Call
Let us rewind the clock to 2017. Mohamed Mohamed was a man under siege. Banks were breathing down Uchumi’s neck, suppliers were not delivering stocks leaving even the most loyal of customers frustrated and looking elsewhere, and they had choices.
A year earlier French retail behemoth Carrefour had entered the Kenyan market. Naivas, Quickmart and Tumaini were other retail chains also muscling in on the sector.
Internally, Mohamed, who was then the CEO, was extinguishing fires from employees who were disgruntled from going on months without pay. Overall, Uchumi was saddled with 4.5 Billion shillings in Debt.
It was a baptism of fire, taking up a role a previous CEOs had dumped like a hot turd.
Julius Kipng’etich, a corporate titan credited for revamping Kenya Wildlife Service had given up on Uchumi as had two senior executives: Andrew Dixon and Willy Kimani. Willy Kimani would go on to Naivas and eventually for his chain Jaza in late 2023 which now has 19 branches countrywide.
But Mohamed, a seasoned accounting and finance man, had a gambit. He was engineering a CVA which is similar to Chapter 11 in the US. Chapter 11, one of the most genius inventions in capitalism, a bankruptcy law that offers companies a lifeline. In short, under Chapter 11 companies tell creditors, give us time to sort our finances and once we are healthy, we will pay you back. And it works.
Apple, now the world’s most valuable company at $3.2 trillion, is an example. In 1997, it was on the verge of collapse. Without Chapter 11 (and Steve Jobs’ vision), the world might never have seen MacBooks and iPhones.
Back to Uchumi.
Mohamed assembled a cohort of bankruptcy lawyers and financial engineers and came up with a CVA. The plan was simple.
- All creditors would hold off on making claims. Their debts would be set aside.
- Uchumi would sell 20 acres it owned in the Roysambu neighborhood of Nairobi’s Kasarani sub-county.
- Part of the proceeds would pay debts, suppliers, and staff.
- The balance would go towards restocking the outlets, revamping the stores.
The bet was that as the retailer resumed normalcy, profits generated would then begin to pay back the onerous debts over a 10-year period. Sounds simple right? It was not.
In the next part, we will go into the history of the land.
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