NAIROBI, Kenya, Jan 7 – The Uchumi supermarket’s 99 million new shares have started trading at the Nairobi Securities Exchange (NSE).
This follows a successful Rights Issue that was oversubscribed by 83 percent to Sh1.6billion. It was seeing to raise Sh895 million.
The retail chain was seeking additional capital to finance its regional growth and expansion programme as it aims to consolidate its position in the region.
“The funds have been earmarked for the expansion of our branch network in Kenya, Tanzania, Uganda and Rwanda, as well as for refurbishing local branches,” Uchumi CEO Jonathan Ciano said.
He said the additional capital will also enable the company to adequately finance working capital for its subsidiaries and grow its market share as well as sales volumes.
Uchumi issued the 99 million ordinary shares at a price of Sh9.
“The success in this issue is an indication of high interest in capital market business and we are happy that our shareholders and the public have continued to believe in our brand,” Ciano noted.
Uchumi, which is the only public-listed supermarket chain, has 37 stores in Kenya, Uganda and Tanzania with plans to venture into Rwanda and Burundi soon.
“We have come to a new start of where to put that money as was already envisaged. We have a number of new branches we have opened in the last one year and those are about eleven. We also have fourteen new outlets in the East Africa region,” Ciano explained.
In September, the retail chain paid the Treasury Sh33 million, the final payment of the Sh627 million loan it owed the government.
The loan had been 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.