Uchumi Supermarket’s 99,534,980 new ordinary shares started trading at the Nairobi bourse today following a successful rights issue which raised Sh 895,814,820 in additional capital.
The rights issue received a 83.5percent oversubscription totaling to Sh 1,644,646, 140.
Uchumi Group Chief Executive Officer and Managing Director, Dr. Jonathan Ciano, said the additional capital will be used to finance the firm’s regional growth and expansion programme as it aims to consolidate its position in regional markets.
“The funds have been earmarked for the expansion of our branch network in Kenya, Tanzania, Uganda and Rwanda, as well as for refurbishing local branches. This additional capital will also enable us to adequately finance working capital for our subsidiaries with a consequent growth in market share and sales volumes,” Ciano said.
Cabinet Secretary for the National Treasury, Henry Rotich said that the Government would not shy away from propping up businesses which hold a strategic interest.
“Uchumi is an iconic brand and as a Government, we have remained loyal to the organization throughout its recovery process. The Government has resolved to remain as an anchor shareholder of Uchumi and that is why it took up its rights fully and even applied for more,” said Rotich.
The only public-listed supermarket chain, listed on the Main Investment Market Segment of the NSE in 1992.
Its resounding success of the rights issue was assured by the fact that the supermarket chain is listed on the NSE.
Director for Corporate Finance at Faida Investment Bank, David Mataen, said that at current market penetration levels by established retail shopping chains, Uchumi Supermarkets provides a compelling investment opportunity for both institutional and individual investors.
Uchumi has 37 stores in Kenya, Uganda and Tanzania and is planning to venture into Rwanda and Burundi in the near term.