Uchumi Supermarkets (Stock; UCHM) has announced it has finally found a strategic investor to take a controlling equity stake in the business in exchange for a Sh3.5 billion capital injection.
The company’s CEO Mr Julius Kipngetich on Tuesday told Capital FM that official announcement will be made once the deal is approved by key regulatory bodies.
According to media reports, the Nairobi Securities Exchange listed retailer owes suppliers and financiers more than Sh 5 Billion. The new capital injection will be used to settle part of the outstanding debt as well as help in restocking its empty shelves.
Last December, the cabinet approved a Sh 1.8 billion bailout with Sh 500 Million already disbursed according to KBC. The retailer expects the remaining Sh 1.3 billion bailout package in the next few weeks.
The strategic investor was expected to come in early but was awaiting for government’s assurance that it would release the bailout “balance.”
Mr Kipngetich was quoted by Capital FM, “We have so far received Sh500 million from the government and with the injection from the investor, we are now ready to restock our stores in the next 90 days. Our franchise model of business will also begin in those 90 days.”
Jamii Bora Bank is the largest shareholder in the company with a 14.9 percent stake followed by the Kenyan Govt with a 14.7 percent stake. Its still not clear on what percentage of the company will be allocated to the “strategic” investor.
Share Price Performance
On Tuesday’s trading session, Uchumi emerged the biggest gainer by 8.70 percent to close at Sh 2.5 per share.