NAIROBI, Kenya, Jan 20- The government is set to own an 11 to 13 percent stake in Uchumi Supermarkets which should be out of receivership next month.
If during the January 29 Annual General Meeting (AGM) shareholders approve the resolution to have government debts converted into equity, Receiver Manager Jonathan Ciano said this would see a small percentage of the total shares of the retail chain allocated to the government.
“The projected government ownership will not be more than 13 percent. That is a drop in the ocean for a company that is worth close to Sh4 billion,” he said while refuting media reports that the government’s shareholding would be 40 percent.
The government injected Sh675 million into the chain in 2006 to rescue the supermarket that was on the verge of collapse due to financial mismanagement. When the conversion exercise is effected, some of these loans will also be partly converted into restructured term loan of four or five years.
“The government is not interested in running and managing supermarkets, it is interested in steering and stabilising the economy,” he said in the government’s defence.
The government has indicated that it will later offload its shareholding in the chain allowing members of the public who would like to buy in.
“The government’s holding will be available and released to the market in such a way that does not destabilise the Nairobi Stock Exchange (NSE) or the market,” he said while referring to the conversion exercise which will see the number of shares go up from 180 million to 260 million. This will translate into a dilution of the public float.
However, Mr Ciano said the dilution would not necessarily have a negative impact on the shareholders and added that he expects the share price to perform well when Uchumi re-lists on the NSE.
“If you want to say it’s diluted yes it is but with the purpose of expansion,” he added.
Mr Ciano spoke when Uchumi signed a deal with medical insurance provider Changamka Microhealth that will see Kenyans purchase electronic medical cards from the chain’s outlet which they can then use to access affordable healthcare.
Changamka Chief Executive Officer Samuel Agutu explained that people particularly those that are excluded from the conventional healthcare system will need to purchase the card for Sh500, which will cover the cost of one hospital treatment at 16 selected providers.
“The card empowers the individual to plan for medical emergencies as he can load it and keep it until it is needed for treatment for him, his immediate or extended family as it is a bearer’s card,” he said.
The move, he added, had been prompted by the need to use technology to bring affordable healthcare closer to the people.
“Contracted healthcare providers have Changamka terminal which verify the credit status of the smart cards. Once verified the cardholder is allowed a consultation and drugs for Sh450. Finally a receipt is issued from the terminal for the client and hospital record keeping,” the CEO explained.
Since its inception, the company has already sold 4,000 cards and is targeting to have 500,000 cardholders in the next one and a half years, he added.
The two officials said the initiative was a win-win approach for their organisations as it would not go a long way in improving healthcare in the country but enable the chain to provide innovation services to its customers.