Uchumi bosses to map its future

May 15, 2009

, NAIROBI, Kenya, May 15 – Uchumi Supermarkets’ Advisory Committee is to sit next week to map out how to get the retail chain out of its technical insolvency.

Uchumi’s Receiver Manager Jonathan Ciano said on Friday that the committee would either be looking at the option of asking its shareholders to inject more capital into the chain or getting the debenture holders to convert them into equity.

“The advisory committee has come back and said ‘we have had so many enquiries from the shareholders can we urge them if they want to take back the company?’ Because if they don’t, then we can sell the company.”
Mr Ciano however believed that shareholders would want to take their company back as it was now posting profits for the second year running.

He said the chain’s customer numbers had increased from five million to 16 million while the revenues have gone up from Sh3.5 billion to Sh10 billion.

“The growth that we are recording is real and we are ready to move on with all Kenyans. We are going to make profits in the year ended June and that is for the benefit of the shareholders,” he said.

“If you are an Uchumi shareholder, wait until we get clearance to come back to you, and we will be able to give you back you company,” he advised adding that this would happen as they await to be re-listed on the stock market.

A consultant had already been identified and would be contracted once procedures were completed. However, he sought to assured them that their debentures, which are secured loans, would be earning interest.

“We shall go back to the stock exchange within reasonable time. But as a debenture holder, you will be earning interest equivalent to the dividend that you’d be getting anywhere else,” he comforted the loanees.

Speaking to reporters after flagging off 18 winners of the ‘Utalii Kenya na Uchumi’ promotion, Mr Ciano maintained that its plans to seek a strategic equity partner, even though delayed, were still on.

The partner has not been identified since August 2007 when the chain announced its intention to look for one to help them address the eroded capital base of the chain.

Its financials have however since improved. Suppliers are now being paid on time and within credit terms, Mr Ciano said.

“We have virtually paid every debt that we owed anybody including the secured creditors,” he boasted.

By next month, he further revealed, they would have paid them Sh500 million out of the Sh950 million they owed while suppliers are only owed Sh190 million, down from the Sh900 million that was outstanding before the chain was placed under receivership three years ago.

He added that they have close to Sh300 million float in their accounts to take care of their suppliers.

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