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Uchumi Chief Executive Officer Jonathan Ciano said this indicates a seal of approval in the market of the company's direction/FILE

Kenya

Uchumi Rights Issue oversubscribed by 83pc

Uchumi Chief Executive Officer Jonathan Ciano said this indicates a seal of approval in the market of the company's direction/FILE

Uchumi Chief Executive Officer Jonathan Ciano said this indicates a seal of approval in the market of the company’s direction/FILE

NAIROBI, Kenya, Dec 16 – The Uchumi Supermarket Rights Issue has been oversubscribed by 83 percent receiving Sh1.6 billion against the target of Sh895 million.

The retail chain was seeking additional capital through issuance of 99 million ordinary shares at a discounted price of Sh9.

Uchumi Chief Executive Officer Jonathan Ciano said this indicates a seal of approval in the market of the company’s direction.

“We are overwhelmed by the level of confidence our shareholders have demonstrated over the period of the issue despite a false start and as management we promise that the funds will be put into projects that will continue to create more value to our shareholders,” he said.

The retail chain wants to finance its regional growth and expansion programme as it aims to consolidate its position in regional markets.

The funds have been earmarked for expansion of its branch network in Kenya, Tanzania, Uganda and Rwanda, as well for refurbishing 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 added.

In September, the retail chain 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.

READ: Uchumi repays the Sh627mn loan from government

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Last year, the company successfully cross-listed on the Rwanda Stock Exchange on October 14, 2013 and the Uganda Securities Exchange on November 13, 2013.

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