Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
UCHUMI is seeking Sh5bn through strategic investor/file

Kenya

Uchumi seeks Sh5bn through strategic investor

UCHUMI is seeking Sh5bn through strategic investor/file

UCHUMI is seeking Sh5bn through strategic investor/file

NAIROBI, Kenya, Dec 23- Uchumi Supermarkets is planning to get a strategic investor to take a controlling stake in the firm in exchange for Sh5 billion capital injection.

The cash will be raised through either equity, convertible debt or a combination of both.

“The directors are hereby authorised to identity and negotiate with any suitable investor to raise any sum up to a maximum of Kenya Shillings five billion by way of debt capital through the issue of convertible debt instruments or by way of equity capital by way of private transfer of shares in Uchumi to the investor or a combination of both options,” read a section of public notice for the Annual General Meeting expected to take place in January on Wednesday.

“The investment shall be on terms determined to be suitable by the directors of Uchumi and tabled for ratification by the shareholders at the next annual general meeting (subject to any required regulatory approvals),” the notice read.

The move comes at a time when the retailer has been carrying out a restructuring plan which has seen it replace top management, close some outlets and re-negotiate contracts with suppliers.

The retail chain, which was once the largest in Kenya, has lost market share over the years as new entrants joined the market.

The strategic investor is expected to support the retailer’s plans to recover its position in the market.

“The nominal share capital of the Company be and is hereby increased from Kenya Shillings five billion (Sh 5,000,000,000) …….. to Kenya Shillings ten billion (Sh10,000,000,000)…,” the company said as one of the plans to be approved by the shareholders come January.

Nakumatt, which is the leading retail chain by revenue, has consistently identified prime locations and partnered with other retail stores in order to stay ahead of the market.

Tuskys and Naivas, both of which target low end segments, have primarily succeeded on the back of aggressive marketing, product bundling and high foot traffic locations

Following its 3Q14 rights issue which raised Sh 895.8million, Jamii Bora Bank became the largest shareholder at 15.7percent stake relegating the government which has 14.6percent stake, to second place.

Advertisement. Scroll to continue reading.

“Given that Kenya remains one of the best retail markets in Sub-Saharan Africa, with retail penetration at about 30percent, we think the move opens up opportunity for international retailers to gain entry into the market,” Standard Investment Bank Research commented on Uchumi’s move.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...