Struggling supermarket chain Nakumatt Holdings has been handed a lifeline to fight for its recovery after the High Court allowed the appointment of an administrator.

The move blocks possible liquidation and gives the cash-strapped Nakumatt headroom to structure a recovery plan even as creditors and suppliers push to be paid their dues.

In his ruling, Justice Fred Ochieng ordered PKF Consulting’s Peter Obondo Kahi to be appointed as an administrator under the provisions of Section 563 of the Insolvency Act.

The administrator is expected to ensure a meeting of all Nakumatt creditors is held and address all their concerns within 60 days of his appointment.

“Within 7 days of the creditors meeting, the administrator will provide all the known creditors and all the court with his report, together with the minutes of the meeting,” reads the ruling.

“It is hoped and expected that the administration Order if properly executed, will be beneficial to all the creditors.”

The administration order also keeps at bay the landlords who have been queuing to evict Nakumatt from its premises, unless allowed by court or by consent of the administrator.

Nakumatt had applied for an administration order last year, proposing the appointment of Kahi as an independent administrator to perform its functions in the interests of its creditors.

Through its lawyer, Nakumatt had said if the company is put under an administrator, it will be able to get back on its feet and pay its creditors.

The retailer has been brokering a deal with Tuskys Supermarket chain through a proposed merger in an effort to stay afloat.

Tuskys agreed to guarantee part of Nakumatt’s estimated Sh40 billion debt and even brokered a deal with a number of suppliers to resume stocking Nakumatt as it implements a recovery plan.