Uchumi Supermarkets secures Kshs3.2b from strategic investor

1819

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By Ronald Owili

Uchumi Supermarkets hopes to return to profitability in the next nine months supported by extra capital it expects to receive from a strategic investor.

Chief Executive Officer Dr. Julius Ng’etich says the retailer has finalized talks with a strategic investor to pump in 3.2 billion shillings, which in addition to the 1.8 billion shillings government bailout will beef up its capital.

This comes as the retail sector adopted a policy to ensure supermarkets are well capitalized, promptly pay suppliers and enhance their capacity.

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The retail sector has hit headlines for mostly the wrong reasons in recent months highlighted by capital challenges facing dominant players like Uchumi and Nakumatt supermarkets.

This has been compounded with debt levels increasing with reports indicating that supermarkets owe suppliers KES 48b.

This prompted Uchumi Supermarkets to seek ways to recapitalize.

The cabinet approved a 1.8 billion shillings bailout last December with half a billion shillings already disbursed.

Uchumi expects the remaining 1.3 billion shillings within three months.

The retailer has also secured a strategic investor who is expected to pump in 3.2 billion shillings subject to regulatory approvals.

The chaos in the retail sector has attracted more government scrutiny.

The Ministry of Industry and Trade is developing a policy to streamline operations by ensuring that retailers enforce a code of practice and promptly pay suppliers.

Stakeholders endorsed plans to draft a retail sector policy on self regulation.

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