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Uchumi shareholders urged to take up debenture

NAIROBI, Kenya, Nov 6 – With about a week to go to the closure of Uchumi’s debenture issue, shareholders who have not taken up the offer are being encouraged to do so in order to raise the targeted Sh1.2 billion.

The chain’s Receiver Manager Jonathan Ciano on Friday expressed confidence that the issue where each unit is priced at Sh10, would appreciate to between Sh15 and Sh17 which would offer a good return to the shareholders.

“If you are a shareholder and want to retain your wealth, please do not let it slip out of your fingers. In the last three years we did what we did for our country. For you who could not come to manage this company, we are there to do that for you,” he said in reference to the chain’s profitability.

Uchumi which almost collapsed under a Sh2.2 billion debt implemented a rescue plan in 2006 which has seen it return to profitability.

In the three months to September 2009, it recorded a profit of Sh50 million and the amount is expected to increase significantly in the coming years.

The Receiver Manager however declined to give any indications of how the uptake of the issue which opened on September 14 and closes on Sunday (November 15) has been.

“It would be premature to tell you whether it is oversubscribed or undersubscribed,” he said of the issue which is the third attempt for the chain to raise additional cash from the shareholders.

Each shareholder has been allocated a minimum of 3,000 units in the issue.

“Whatever the shareholder will not pick, the government has realised how valuable the company is and has said it is ready to consider our loan to be converted into a debenture or into an equity and thereafter they shall make it available to the public,” he said.

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Proceeds are expected to enhance the supermarket’s capital as it looks forward to be lifted out of receivership.

At the same time, Mr Ciano disclosed that they plan to open up seven more branches in various parts of the country and in Uganda by early next year as part of their expansion plans.

The outlets will be in Embu, Kericho, two in Nakuru, Mombasa, Outering, Thika and Kiambu roads.

“We have gone into areas where we feel our economy requires boosting. We are going to where we have never been before,” he added.

With the improved performance, the chain hopes to have its shares re-listed at the Nairobi Stock Exchange soon.

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