Uchumi Supermarket's recovery now hangs in the balance following a delayed restructuring plan that has suffered yet another blow with the resignation chief executive Julius Kipng'etich.
The listed retailer, which is chocking from huge debt owned to suppliers that has seen it close shops in Uganda and Tanzania, had pegged his recovery hopes on a strategic investor who had promised to inject up to Sh3.5 billion within 120 days starting August 1 this year. The stock fell to trade at Sh4.10 yesterday, from Sh4.30 on Tuesday.
In a public notice issued in early August, Uchumi indicated that it had commenced due diligence process with a strategic investor ready to pump in Sh3.5 billion and expected to complete the whole transaction process before end of this year.
It even went ahead to urge shareholders and other investors to exercise caution when dealing in its ordinary shares on the Nairobi Securities Exchange (NSE). The 120 days notice lapsed on December 1.
Even so, the retailer has blamed the protracted election period in Kenya for the delay in nailing the new investor.
Speaking to the Star yesterday, acting head of marketing Henry Bett said that although the restructuring plan is behind schedule, the retailer is still pursuing the mysterious investor.
''The due diligence process was hampered by the protracted presidential elections in the country, but we are optimistic that the deal will be sealed early next year,'' said Kibet.
Even before regaining balance from the election hangover, the retailer has lost the mastermind behind its recovery plan.
According to a public notice issued yesterday, Kipng’etich, whose two-year contract expired in October resigned effective November 30. His position will be occupied by chief financial officer Mohamed Ahmed Mohamed in an acting capacity.
Kipng'etich's exit now put Uchumi on a new footing after aiding it cut full-year losses by 40.8 per cent to Sh1.68 billion for the financial year ended June 30, 2017 and playing a key role in negotiating with the new investors.
He also helped the retailer to acquire a Sh1.8 billion bail-out from the government last year which saw the state disburse the first Sh500 million in January this year.
According to the schedule, the state was to disburse the second phase of Sh700 million by July to support the retailer’s operations while the other Sh600 million was to be released at a later date to enable Uchumi offset supplier debts in Uganda.
The sudden resignation of Kipng'etich has left the above capital restructuring ventures pending with investors, who will not be receiving dividend for the fourth year running, hanging on the chief operating officer Andrew Dixon promise that 'we are coming back and very soon' as twitted yesterday.
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