The government is working on a restructuring programme that will see Uchumi Supermarket reopen in Tanzania and Uganda, Trade PS Cris Kiptoo has said.
Speaking at a bilateral meeting with his Tanzanian counterpart to resolve non-tariff barriers, Kiptoo said that Uchumi was on the right path to recovery following government intervention that will soon reopen regional branches closed in October 2015.
The retailer closed four branches in Tanzania and six in Uganda, leaving over 900 workers in the cold as well as Sh350 million and Sh250 million in debt for suppliers in Tanzania and Uganda respectively.
As part of this plan, Kiptoo has ordered debts owed to suppliers by Uchumi supermarket audited even as the state prepares to release Sh600 million set aside to pay them. The amount is part of the Sh1.8 billion government bailout allocated late last year to revive the cash-strapped retailer.
Kiptoo yesterday told the Star that as a shareholder in Uchumi, the government is keen on ensuring that the retailer is back to its former glory.
He added that his ministry will this week hold a stakeholders meeting in a bid to revive the country’s struggling retail sector, with Nakumatt, a regional leader, also in a serious crisis.
Uchumi head of marketing Henry Bett said the retailer is only waiting for the state to release Sh600 million and the potential Sh3.5 billion from a new investor, who is yet to be named, to resume regional operations.
‘’The ongoing political uncertainty in the country has really stalled us. We will move swiftly once the Treasury dispatches the Sh1.3 billion allocated last year. In January, the exchequer released Sh500 million which we used to offset local debts,’’ said Bett. He added that the process to bring on board a new investor ready to pump in Sh3.5 billion is running smoothly. The identity of the investor however remains a highly guarded secret.
Last month, the retailer issued a public notice asking shareholders and other investors to exercise caution while dealing in its ordinary shares on the Nairobi Securities Exchange (NSE), pending the 120-days transaction process with the new investor.
‘’We are optimistic that the transaction process will come to a conclusion within the stipulated time or less, which will mark the completion of the last mile of recovery strategy,’’ said Bett.
The funds will be used to restock, pay old debts and build public confidence in the struggling retailer whose employees participated in a national protest to demand their two months salaries in early June.
Uchumi has promised to reveal the investor in less than 90 days.