NAIROBI, Kenya, Sept 18 – Retail chain Uchumi Supermarket has paid the Treasury Sh33 million, the final payment of the Sh627 million loan it owed the government. The loan was given to Uchumi for the purpose of reviving the company that had been declared insolvent and closed its doors for 45 days in July 2006.
Speaking while issuing the cheque to the Treasury, Uchumi Chief Executive Officer Jonathan Ciano said the company will issue 100 million shares in October to finance its expansion plans.
“In the next one year we plan to open eight retail branches across East Africa in a bid to competitively and strategically position their business and this will require substantial capital spend,” he said.
He said that the company has already raised Sh1.2 billion for its expansion through asset financing from various banks among them Cooperative Bank.
The group net profit before tax came down by 6.8 percent from Sh486 million in 2012/2013 to Sh453 million in 2013/2014 attributed to losses in the Uganda subsidiary and investing in new branches in Kenya and Tanzania which are yet to mature.
The Uganda subsidiary sales dropped by 12 percent due to competition and supply chain challenges with the company divesting from one of its major locations in Uganda and has considered relocating to an already identified more promising location in the coming financial year.
Last year the company successfully cross listed on the Rwanda Stock Exchange on 14th October 2013 and the Uganda Securities Exchange on the 13th November 2013.
The Treasury also received Sh17.3 million as dividend from the Postal Corporation of Kenya which was the first dividend from the company as well as Sh252 million from Kenya Re Insurance for their 2013 financial year.
Treasury Cabinet Secretary Henry Rotich says the government will merge government owned companies that have similar roles in bid to enhance efficiency pointing out that they are working on a the legal framework that will facilitate the mergers.