Uchumi chain of supermarkets will be forced to meet new conditions set out by the cabinet, before the retailer’s proposal for a SH 1.2 billion state bailout is approved.

According to state house spokesman, Manoah Esipisu, the government has not yet made a decision on Uchumi’s proposal but the process is underway.

“The cabinet has not yet made a decision as reported but it is close to making one. The cabinet asked Industrialization Cabinet Secretary to provide further details on some four specific issues for the final determination to be made,”said Esipisu.

Esipisu was responding to earlier reports by a section of the local media, alleging that the cabinet had approved a SH 1.8 loan to the struggling retailer.

Key among the conditions is for the terms of the cash bailout to be clearly defined; if the injection will be a loan or if it is turned to equity.

The retailer will also be expected to undergo a full audit of its management to ensure competence.

“No one wants to see the crooks who brought Uchumi to its knees not taking responsibility,” Esipisu said.

The cabinet is also seeking to have those responsible for the collapse of Uchumi to be prosecuted.

“Once these proposals in those terms go back to the cabinet, then a decision will be made,” he added.

Uchumi chain of supermarkets is currently struggling with a Sh3.6 billion debt. In March this year, the retailer closed five branches across the country in a restructuring move to cut operational costs that saw 253 employees sent packing.

The one-time giant retail has been struggling to make a turn around since it was put under receivership in  June 2006 over a debt of Sh3 billion. The receivership ended on March 4, 2010, after most of the company’s debts were cleared and others converted into shares and Uchumi resumed trading on the Nairobi Securities Exchange on May 31, 2011.