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Billionaire overtakes Kwal as Uchumi’s top owner

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Billionaire businessman Karim Jamal is now the retailer’s second largest shareholder. Photo/FILE

Billionaire businessman Karim Jamal is now the retailer’s second largest shareholder. Photo/FILE  Nation Media Group

By David Herbling

Posted  Wednesday, December 12  2012 at  19:54

In Summary

  • Uchumi’s 2012 annual report shows that Mr Jamal’s stake stood at 7.56 per cent in June from 5.9 per cent in 2005.
  • Mr Jamal increased his holding in the retail chain when he bought additional stock after the retailer returned to the Nairobi Securities Exchange last year.
  • He is estimated to own shares worth more than Sh1.5 billion with significant holdings in Nairobi bourse listed firms.

Billionaire businessman Karim Jamal has become the second largest shareholder of Uchumi Supermarkets ahead of Kenya Wine Agencies after he bought additional shares following last year’s relisting of the retail chain.

The retailer’s 2012 annual report shows that Mr Jamal’s stake stood at 7.56 per cent in June from 5.9 per cent in 2005.

Uchumi says that Mr Jamal increased his holding in the retail chain when he bought additional stock after the retailer returned to the Nairobi Securities Exchange last year and converted into equity a loan he had lent the retail chain after its near-collapse.

He is estimated to own shares worth more than Sh1.5 billion with significant holdings in Nairobi bourse listed firms like Kenya Power, Mumias SugarSameer, Sasini and Kakuzi where he has been in and out of their top 10 shareholder lists over the past three years.

“Mr Jamal has been buying shares in Uchumi since we went back to the market, but overtook Kwal when he participated in our debenture,” Jonathan Ciano, the CEO of Uchumi Supermarket told the Business Daily in a telephone interview Wednesday.

A debenture is debt instrument that is not secured by physical assets or collateral, and Uchumi issued these lending products to its existing shareholders and suppliers when the chain was searching for more capital to shake off receivership.

Mr Ciano said Kwal never participated in the lending, paving the way for Mr Jamal to cement his holding in the supermarket chain after converting the debentures into shares in a transaction that saw the Government become  the single largest investor with a 13.4 per cent stake.

Of the Sh860 million equity debt swap, the Government’s share was Sh350 million, which earned it 35 million shares, suppliers Sh200 million (20 million shares) and shareholders’ Sh310.

The government loan was part of Sh875 million advanced to the retail chain in May 2006 after its nearly collapsed under the weight of debts, which saw it suspended from trading at the Nairobi bourse till mid last year.

Analysts at Kestrel Capital reckon that Mr Jamal can now push for a board seat or have a direct representative because he is top of the perking order of the retail chain’s top shareholder ranking.

Both Kwal and ICDC are represented in Uchumi’s board despite their lower shareholding of 4.28 per cent and 2.75 per cent respectively.

Mr Jamal’s faith in the retail chain has paid off given that Uchumi paid a dividend this year after a 10-year drought and has had the best performing share at the NSE over the past year.

The retail chain declared a dividend of Sh0.30 per share—the first payout since 2002 and pointer that the management is confident of reversing the drop in earning, which is the first since it began making a profit in 2008.

The payout was boon to shareholders who have seen their share rise 185.82 per cent to touch a high of Sh20 over the past year, making it the top performer at the NSE in the period.

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