Companies

Kenya Wine sells Sh126m Uchumi Supermarket stake in latest exit deal

uchumi

Uchumi CEO Jonathan Ciano says Kenya Wine Agencies Holdings sold the shares in the open market as part of its re-organisation. PHOTO|FILE

Kenya Wine Agencies (KWA) Holdings has sold off its Uchumi Supermarkets stake currently valued at Sh126.5 million, marking the State-owned corporation’s exit from the retail chain’s top shareholders roll.

Regulatory filings show that the company, which owns the Kenya Wine Agencies Limited (KWAL), sold the 4.23 per cent Uchumi stake in the 10 months to April.

It held 11.2 million shares in May last year but had sold the entire holding by May this year, relinquishing its position as the third-largest local institutional investor in the supermarket chain.

READ: KWAL exits Uchumi in Sh240m deal

Uchumi CEO Jonathan Ciano told the Business Daily that the government-controlled KWA Holdings sold the shares in the open market as part of its business re-organisation.

KWA has been involved in multi-million shilling deal-making recently, with its shareholders ceding a 26 per cent in KWAL to South African firm Distell Group for Sh855 million.

KWA previously owned 100 per cent of the wine and spirits marketer, with the Distell deal coming after the South African firm demanded a stake in the firm that has been distributing some of its brands in the region.

Besides KWA, several other top investors exited Uchumi’s top shareholders roll including Mumias Sugar Company which had 0.83 per cent and and Goodwill with 4.74 per cent stake.

Mumias was part of a group of Uchumi’s suppliers who were allotted stakes in the retailer after the supermarket failed to settle its debts when it went under in June 2006.

Other firms that benefitted from the conversion of Uchumi’s debt into equity were Brookside Dairies, New KCC, Bidco, Unga Limited, Mini Bakeries and Premier Bakeries.

Most of the institutional investors sold their stakes following Uchumi’s recovery and subsequent relisting in 2011, exiting at a profit from dividends earnings and capital gains.

New KCC with a 0.28 per cent stake and Premier Flour Mills (0.21 per cent) are the continuing shareholders listed among the retailer’s top owners.

The Sh860 million debt-to-equity conversion was based on a target price of Sh10 per share, opening an opportunity for significant capital gains from the retailer’s stock performance since its relisting in May 2011.

Uchumi’s stock has stayed above the Sh10 mark since April 2012, rallying to touch highs of Sh21.75 last year.

It, however, started receding this year after the retailer released weaker results for the half-year ended December, with the stock currently trading at Sh11.25.