Uchumi Supermarkets will receive Sh3.5 billion from an undisclosed strategic investor by the end of January next year, it said yesterday, even as Carrefour Supermarkets dismissed speculation that they could be the one taking over the troubled retailer.
Briefing journalists on the firm's recovery plan, Uchumi acting chief executive Ahmed Mohamed said negotiations with the strategic investor, which had been delayed by the protracted presidential elections, were in the final stages
''We have signed some key transactional papers with the investor and we are expecting him to channel the agreed Sh3.5 billion before end of January,'' said Mohamed.
Uchumi has been scouting for a strategic investor to inject life to its operations that have been on a limping mode for the past three years due to accumulated debts to suppliers. In January last year, an investors’ annual general meeting resolved to identify an investor to pump in Sh5 billion by way of debt capital, convertible debt instruments or equity capital.
Although the listed retailer revealed that it was conducting due diligence with a strategic investor in August this year, it has remained tight-lipped on the identity of the would be shareholder, leaving the public to speculate.
Yesterday, Dubai-based Carrefour, which is among firms rumoured to be aiding Uchumi out of the woods, played down the suggestion. Majid Al Futtaim Hypermarkets (the operators of Carrefour franchise in Kenya) country manager Franck Moreau told reporters that "those were just others rumours as many others that have been told about the firm".
Uchumi re-opened its revamped stores in Nairobi yesterday after closing them on Wednesday to undertake restocking after receiving Sh700 million from the government as part of its Sh1.8 billion bailout plan.
''We have kicked off our much-promised restocking exercise as the first step to getting Uchumi Supermarkets back on track. A part from replenishing stock, the money has been used to settle employee salaries and setting up new agreements with our suppliers, 99 per cent of whom have backed our plans,'' said Mohamed.
Uchumi chief operating officer Andrew Dixon said the firm will have restocked 95 per cent of its stores by the end of this weekend.
''Despite the difficulties Uchumi has faced over several years, the support from the public has carried the board through and has fortified the brand's resilience. The market environment will continue to be challenging into next year, but we are now placed with clear plans and renewed level of confidence that will catalyse stronger performance and create long term sustainable value for our stakeholders,'' said Dixon.
The Sh700 million was in addition to another Sh500 million the firm obtained in January this year and is expected to receive a further Sh600 million to re enter the closed Uganda and Tanzania markets.
The cash-strapped listed retailer has historically grappled with financial instability that has forced it to seek bail-out from shareholders, financial institutions and even selling some of its assets. In 2006 for instance, Uchumi was declared insolvent and suspended from trading on the NSE due to high public debt.