Kidero exits list of Uchumi’s top individual shareholders

Nairobi governor Evans Kidero has exited the top shareholder’s list of Uchumi Supermarkets as billionaire investor Paul Wanderi Ndung’u raised his stake in the retailer to 5.4 per cent, making him the largest individual investor.

Regulatory filings show that Mr Kidero disappeared from Uchumi’s list of top owners in February, signaling that he either sold his 234,577 shares or was heavily diluted in the recent cash call that saw the retailer issue 99.5 million new shares.

Mr Kidero, whose ownership was equivalent to a 0.08 per cent stake, first bought into the retailer in 2012 at the same time the chairman of investment bank Dyer & Blair Jimnah Mbaru also took a minority position in the company.

Mr Mbaru retained his 0.09 per cent equity after defending his stake in the rights issue that raised Sh895.8 million.

Mr Ndung’u, who previously held a 3.3 per cent stake, raised it to 5.4 per cent worth Sh207 million indicating that he defended his rights and bought additional shares in the cash call.

This saw him replace businessman Karim Jamal as the retailer’s single largest individual shareholder. The stake held by Mr Jamal dropped to 2.4 per cent from the previous 3.4 per cent, signaling a dilution or partial transfer of his portfolio.

The share purchases in Uchumi have expanded Mr Ndung’u’s interest at the Nairobi Securities Exchange (NSE) where he holds minority stakes in several firms including Kenya Re and Olympia Capital.

He was among the investors who applied for and received more shares in the retailer as a section of shareholders failed to take up their rights.
Uchumi priced the cash call at Sh9 per share, offering the 99.5 million new shares at a rate of three for every eight held.

This almost matched the price of its stock trading on the NSE at the time, bucking the trend where firms usually offer large discounts to encourage uptake of the rights.

Shareholders applied for a total of 64.3 million shares worth Sh579.1 million in the original allotment, representing a 64.6 per cent subscription as a section of shareholders sidestepped the cash call.

READ: Seal of approval as Uchumi rights issue is overshot by 83 per cent

Uchumi however received applications for additional 118.3 million shares worth Sh1 billion from shareholders keen on defending and raising their stakes in the company.

The firm however took only Sh895.8 million, with those applying for extra shares allotted the stocks on a pro rata basis.

Besides Mr Ndung’u, institutional investor Jamii Bora Bank (JBB) also aggressively bought into Uchumi, applying for additional shares that saw it emerge as the top investor with a combined 15.8 per cent stake. Treasury, which was previously in pole position, is now relegated to second place with a 14.6 per cent stake.

Uchumi recently appointed JBB’s chief executive Sam Kimani as a director to reflect its clout. The retailer also named Ms Margaret Kositany and oil marketer Vivo Energy’s CEO Polycarp Igathe as independent directors.

READ: Uchumi appoints Jamii Bora chief to its board

The change in shareholding structure and board composition comes at a time when the retailer has posted losses linked to high finance costs.

It made a pre-tax loss of Sh262.3 million in the half year ended December compared to a loss before tax of Sh106.9 million a year earlier. Its share price has changed little since the start of the year to trade at Sh10.5.