NAIROBI, Kenya, Oct 10 – The Uchumi Rights Issue is now set to open in November following approval by the Capital Markets Authority (CMA).
The authority said it was satisfied that the disclosures submitted by the company complied with regulatory requirements for public offers and listings.
“Submission by Uchumi is sufficient and contained information that will enable investors make an informed decision on the Rights Issue,” CMA said in a statement.
“We are delighted by the seal of approval by the CMA and the NSE. I would now call upon our shareholders to exercise their rights as we enter this new and exciting phase of our growth plans,” Uchumi’s CEO Jonathan Ciano said.
The retail chain is seeking to raise close to Sh1 billion to finance its regional growth and expansion programme as it seeks to consolidate its position in regional markets.
The funds will partly finance the retail chain’s seven year growth and expansion programme that will cost Sh2 billion. The company has already secured the remaining Sh1 billion through asset financing and loans from commercial banks.
The funds will be used to open new branches as well as refurbish local branches.
“We plan to open more branches across East Africa in a bid to competitively position our business and this requires substantial capital expenditure. We also want to be able to adequately finance working capital for our subsidiaries with a consequent growth in market share and sales volumes,” Ciano said.
The company has picked Faida Investment Bank as lead transaction adviser, Equity Bank as sponsoring broker, Hamilton Harris & Matthew Advocates as legal adviser, Ernst &Young as auditor, ICDC as the share registrar, and Hill + Knowlton Strategies as public relations and advertising consultant.
The issue opens on November 10, 2014 and closes on November 28.