Financial Times

Creditors take Sathosa to the cleaners
By Quintus Perera
Creditors of the troubled Sathosa (CWE) Retail Ltd are gradually lining up with legal suits to recover their dues running into millions of rupees. According to some estimates, the government – biggest shareholder in International Grocers’ Alliance which ran Sathosa -, owes some Rs 340 million to the other shareholders, a Rs 300 million bank overdraft while supplier dues run into millions.

Food industry sources said that at the time the supermarket chain closed, it owed around Rs 900 million to suppliers while this may have come down now to about Rs 700 million. Last week Nestle Lanka Ltd, one of the suppliers, took out a newspaper advertisement saying it has petitioned the District Court of Colombo for the winding up of the Sathosa Retail Ltd to recover its dues.

Earlier New Zealand Dairy, owners of Anchor milk, took Sathosa to court. Jeyaraj Fernandopulle, Minister of Trade and Consumer Affair, told The Sunday Times FT, that Sathosa Retail Ltd won’t be liquidated but revived soon.
When asked how soon, he said that they hope to reopen by October.
He said that since June 3,158 workers have been paid at the rate of Rs 4,000 each per month.

Wasantha Samarasinghe, General Secretary, Inter Company Employees Union, confirmed that for the last three months the workers of the company have been paid at the rate of Rs 4,000 per month. He said that they had a discussion with the Minister about reviving Sathosa.

The government is putting forward a proposal of a Voluntary Retirement Scheme (VRS), which he said the union had no objection to if it is voluntary.
Other official sources said the government is considering selling of a land 226 perches in extent belonging to the CWE at Union Place for Rs 900 million to raise funds to revive Sathosa Retail.

Back to Business