Administrators of the collapsed fashion retailer, Deacons East Africa #ticker:DCON, have moved to sell the company in a bid to raise funds to settle its liabilities which stand at more than Sh1 billion.
In a notice Tuesday, the joint administrators Peter Kahi and Atul Shah of audit and accounting firm PKF Consulting called on interested parties to put a bid through Dyer & Blair for businesses and assets of Deacons’ 4U2, Adidas, Bossini and FNF brands.
Eight out of the nine outlets of the brands are located in malls within Nairobi with the exception of a Bossini store found in Rwanda.
“At a creditors meeting held on January 22, the administrators’ proposal was approved, authorising the administrators inter alia and in conjunction with a transaction adviser, to undertake a competitive and transparent transaction process aimed at identifying strategic or financial investors…” said the joint administrators in the notice.
“…with a view to achieving either a recapitalisation of the company through an injection of equity and or restructure of its debt obligations, or a sale of all or some of the stores of the company.”
A report by Deacons’ administrators PKF Consulting published last year revealed the retailer’s asset-light business model that has left more than 120 creditors staring at total losses following the collapse of the company’s cash flows and earnings.
Deacons’ major assets are furniture and stocks, inadequate to cover even secured creditors.
On paper, Deacons has some Sh606 million worth of assets to cover their claims but PKF said their forced sale would fetch only Sh63 million.
The company made a net loss of Sh558 million in the 11 months through November 2018.