Nakumatt eyes PE investors in June to fund expansion plans

A Nakumatt supermarket branch in Nairobi. The supermaket chain has 36 branches and plans to increase to 50 across Africa by 2014. File
A Nakumatt supermarket branch in Nairobi. The supermaket chain has 36 branches and plans to increase to 50 across Africa by 2014. File 

Retailer Nakumatt Holdings is seeking to open talks with private equity investors and international retailers from June to help fund its regional expansion plans.

The managing director of the retail chain Atul Shah told The African Report in its April issue that it will consider bringing on board fresh investors to the family-owned supermarket after hanging up on Sudanese billionaire Mo Ibrahim in 2009.

The chain has indicated its intention to extend its wings to West and South Africa as part of its strategic plan to grow beyond the East African region with Nigeria, Gambia, Zimbabwe, Botswana and Malawi on its radar.

“We shall be ready again to talk with trading partners after June this yea after closing and auditing our books,” Mr Shah said.

“Yes, we were looking at PE a few years ago with Mo Ibrahim, but at that time we were not happy with our books,” he said.

Nakumatt turned to commercial banks for funds after buy-out talks with a consortium led by London-based private equity firm Satya Capital collapsed, sending the management back to the drawing board. Satya Capital is associated with Dr Mo Ibrahim.

Mr Shah told Reuters in February that the chain would initially seek to sell a 15 per cent to 18 per cent stake for $50 million (Sh4.2 billion) to private equity investors and invite international retailers to take up about 25 per cent to 30 per cent thereafter.

Nakumatt is currently owned by the Atul Shah family and Hotnet Ltd, a company associated with the Kilome Member of Parliament Harun Mwau. The supermarket management want to attract equity investors rather than rely on costly bank loans, and does not intend to list on the Nairobi bourse for the next four years, said the company. The chain, which targets middle and upper income customers, has a total of 36 branches in Kenya, Uganda, Tanzania and Rwanda, and hopes to open outlets in South Sudan and Burundi by the end of next year.

“Our next landing will be in West and South Africa where we want to conquer and create more wealth not only for Kenya, but for Africa,” Mr Shah told the Business Daily recently, added that the retail chain expects to grow sales 20 per cent in the year to June.

(Read: Nakumatt eyes expansion to South Africa)
As the continent’s middle class continues to expand, with more disposable incomes and a refined taste in consumer goods, Nakumatt plans to increase the number of branches to 50 across Africa by 2014.