Troubled e-commerce firm Copia Kenya has suspended its ordering services in six towns, barely a week after it was placed into administration over cash flow issues.
In an internal communication to staff, the company announced that it had suspended deliveries in Meru, Embu, Kericho, Eldoret, Machakos and Naivasha, effective May 29.
The company said staff at the affected stations would be put on leave pending further instructions.
“We regret that we must cease servicing these areas at this time as we change the size and format of our operations. We look forward to returning to these areas in the future,” Copia's human resources director Anne Mwihaki told staff.
In another email, Makenzi Muthusi, one of Copia's appointed administrators, assured staff the company had funds to cover their May salaries but delayed payments because it “failed to complete paperwork relating to its bank accounts.”
Copia's board placed the company into administration on May 23 in a bid to provide stability amid recent turmoil.
The company has hired Muthusi and Julius Ngonga of KPMG to lead an administration process to keep the company afloat.
Administration is the process in which an insolvency trustee is appointed to ensure the continuity of the business and restructure it to either transform it into a profitable company or to sell the business in order to preserve its value.
Copia said it expects the local management team, under the administrators' oversight, to execute on plans to reduce burn rate, accelerate the path to profitability and focus on increasingly digital consumers.
Copia Kenya said it would try to preserve jobs, but the fintech firm said it would have to lay off some staff.
The company's placement into receivership comes just weeks after Copia announced it would furlough 1,060 staff in a workforce reduction plan, mainly citing liquidity constraints.
The company's CEO, Tim Steele, recently told employees that affected staff would be sent home after a month in accordance with labour laws.
Copia was founded in 2013 by former Silicon Valley titans Tracey Turner and Jonathan Lewis.
The model consists of digitally enabled, community-based agents that act as ordering and delivery hubs that meet consumers where they are, online or offline.
