NAIROBI, Kenya, Nov 14 – All Uchumi supermarket stores are currently being restocked in readiness to be opened on Sunday.
Acting Chief Executive Ahmed Mohammed says all branches will be stocked at 95 percent after a majority of suppliers agreed to restock the retailers.
The restocking was made possible after the government released Sh700 million out of a Sh1.2 billion bailout loan they had been promised by the state to revive Uchumi’s Kenya operations.
He says this is the beginning of a new chapter for the retailer as it seeks to get back to profitability.
The government had committed to pump Sh1.8 billion in Uchumi of which Sh1.2 billion was for Kenya operations while Sh600 million was for other operations in Uganda and Tanzania.
Another Sh3.5 billion is set to be brought in by a strategic investor by January 2018.
“Discussions are at a high level with the strategic investor who will inject Sh3.5 billion into the business that will significantly boost our margins and partly plug the Sh5 billion debt hole the supermarket owes suppliers and financiers,” he said.
So far the firm owes Sh3.8 billion to suppliers.
“We are yet to sell our Kasarani Land. We have offers and still in negotiations, the land is worth Sh3.8 billion,” Mohammed said.
Uchumi postponed its Annual General Meeting (AGM) from December 20, 2017, to a later date to allow negotiations with the potential investor.
The supermarket says once the negotiations are concluded with the investor, a new date will be set.
The board, however, anticipates that the AGM will be held before 31st March 2018.
The move comes even as Chief Executive Dr. Julius Kipngetich resigned last week after two years attempting to turn around the struggling retailer.
He left having secured a strategic investor in a deal expected to bring back the retailer back on its feet.
Uchumi Supermarket cut their losses by 40 percent in the 2017 financial year to Sh1.7 billion compared to Sh2.8 billion losses in 2016 attributed to improved cost management.
Expenses went down by 42 percent in the period under review from Sh3.6Bn in 2016 to Sh2.1Bn in 2017 while the cost of sales hit Sh2.5bn from Sh6.4bn in 2016.
Uchumi’s stock price was up 10 percent today following the restocking announcement.