(Bloomberg) -- The administrators of Deacons East Africa Plc said creditors approved plans to sell some of the Kenyan clothing retailer's assets to reduce debt that piled up after an unsuccessful expansion program.
The proposals, which include recruiting a strategic investor, “were voted for 100 percent,” Peter Kahi, joint administrator with Atul Shah of PKF Consulting Ltd., said by email on Tuesday.
The company's liabilities stood at 1.12 billion shillings ($11 million) in November, according to a report presented to creditors. They include NIC Group Plc, a Nairobi-based lender that's owed about 387 million shillings.
Deacons, 14 percent owned by Swedish development-finance institution Swedfund International AB, needs as much as 60 million shillings to improve liquidity and boost sales, according to the report.
The company with operations in Uganda and Rwanda was placed under administration in November after the loss of its biggest franchise, Mr. Price, a South African retailer. Resultant financial difficulties were exacerbated by heightened competition, the collapse of anchor tenants at Deacon's key locations, and a failed expansion plan, according to the administrators.
Revenue dropped to about 646 million shillings in the year through November, from 2.3 billion shillings previously, PKF's report showed. The company reported a loss of 628 million shillings in the period and “may be unattractive to potential investors or buyers,” it said.
PKF plans to appoint a transaction adviser by the end of May to help identify strategic investors.
To contact the reporter on this story: Bella Genga in Nairobi at bgenga2@bloomberg.net
To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, David Malingha, Helen Nyambura
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