, NAIROBI, Kenya, Nov 2 – Local retail chain Uchumi Supermarkets is seeking to increase its share capital by Sh1 billion through a Rights Issue.
The share capital currently stands at Sh2 billion, which the retailer hopes to boost by creating 200 million new ordinary shares at a nominal value of Sh5.
The retail chain also wants to float 100 million shares in the market at a price that is yet to be announced following regulatory approval.
In addition to raising additional capital, Uchumi plans to cross-list its shares in the Uganda Securities Exchange, Dar-es-Salaam Stock Exchange and the Rwanda Over the Counter Market.
It is likely Uchumi will use the new funds for expansion in its regional subsidiaries.
The company posted a decline in its 2012 full year pre-tax profit of 21.7 percent to Sh403 million from the previous year’s Sh515 million.
The supermarket chain attributed the poor performance to escalating operating costs that jumped 48 percent, which were exacerbated by the increased branch network in the region.
Uchumi opened three new branches in Uganda, Tanzania and Kenya bringing its total branch network to 24 branches.
It declared a dividend of Sh0.30 per share for the first time in 10 years, after resuming trade of its shares at the bourse last year.
The retail chain joins several listed companies that put out cash calls this year including Kenya Airways, NIC Bank and CfC Stanbic.