Nakumatt Supermarkets has announced plans to list on the Nairobi Securities Exchange and neighbouring stock markets within the next three years, offering investors a chance to own a piece of the region’s biggest retailer valued at Sh35 billion ($400 million).
The retail chain has also said it will sell a 25 per cent stake within the next six to 12 months to fund growth.
Nakumatt had announced suspension of talks with strategic investors following the Westgate Mall attack last year that destroyed its most lucrative branch, but now says it has re-opened negotiations to sell part of the business.
“It is instructive to note that given that we are now considering to sell an equity stake (and not strategic investment), the stake in consideration will be significantly less than 25 per cent,” Nakumatt MD Atul Shah said in a statement.
“We are also progressively putting in place the requisite structures and systems to facilitate the cross-listing of Nakumatt at the regional bourses in the next 3-4 years.”
Going by the retailer’s current valuation revealed in October, an investor buying a quarter of the retailer would have to pay about Sh8.8 billion.
Mr Shah said the listing by introduction will be done at the NSE as well as at the Kampala, Dar es Salaam and Kigali bourses.
Kenyan retailers are currently seeking funding for expansion into neighbouring countries including the relatively under-developed South Sudan and Burundi, which have largely informal retail markets.
Uchumi has lined up a Sh1.5 billion rights issue by the end of the year to raise cash for expansion to help the retailer claw back lost market share that has seen it drop to the fourth position in terms of sales.
Recent plans by South Africa’s Massmart to acquire a majority 51 per cent stake in third-placed Naivas Supermarkets flopped due to family feuds over ownership.
Nakumatt said negotiations for sale of the minority stake will be complete by August next year.
“We should be in a position to close such talks in about 6-12 months,” Mr Shah said, adding that foreign investors eyeing a piece of the local retail market have been courting the supermarket chain.
The supermarket faces growing competition from rivals Tuskys, Naivas and Uchumi.
Nakumatt is currently owned by the Shah family and Hotnet Ltd, a company associated with former Kilome MP Harun Mwau. The sale of 25 per cent stake could leave the Shah family as majority shareholders.
Nakumatt two weeks ago opened the second of the three branches in Dar es Salaam bringing to 49 the total number of Nakumatt stores across Kenya, Uganda, Tanzania and Rwanda.