NAIROBI, Kenya, Oct 22 – Uchumi Supermarkets is set to sell two prime properties in Nairobi to improve business liquidity and finance growth.
The move comes a week after the firm announced the closure of its operations in Tanzania and Uganda in reorganisation intended to stop financial haemorrhaging.
The retail chain has offered to sell its Ngong Road and Langata Road properties on a sale and lease back basis.
Uchumi Chief Executive Julius Kipng’etich says the move will improve the cash flow situation in the retailer as it seeks to revamp its operations in pursuit of growth.
“The business needs the cash to finance the ongoing rebranding and restocking of all our stores as well as meet our operational requirements,” he explained.
The Capital Markets Authority has already given the go-ahead for the sale.
The Ngong Road property covers 2.5 acres of land while that on Langata Road lies on 3.7 acres of land.
The properties will be sold through an open tender system with the bidding process closing on October 30, 2015.
Coulson Harney Advocates will be handling the process with bidders advised to obtain tender packs for each of the properties from them.
Each tender pack will cost Sh5,000 and will contain full description of the property, copies of title documentation as well as terms of engagement.
“The advocates have been instructed not to accept bids from parties who have not purchased a tender pack. Only those with tenders which meet the qualifications as set out in the terms and conditions of the tender pack will be considered,” he added.
Also, a banker’s cheque worth Sh500,000 made out to Coulson Harney Advocates must accompany the tender, which will be retained in the event that a tender is accepted. Unsuccessful bidders will receive back the Sh500, 000 without interest.
The new CEO maintains that he has to stabilise Uchumi within three months before moving to the next step.
The retailer has already warned that its 2015 full year profit will decline by about 25 percent attributed to what the management termed as ‘challenges of working capital’.