Shareholders give Uchumi nod to seek Sh5 bn capital boost
What you need to know:
Shareholders gave the green light for the plan in the annual general meeting Wednesday where five new board members were also confirmed.
Retail chain Uchumi Supermarkets has received shareholders' nod to source for investors to inject Sh5 billion into the company as it seeks to reverse a Sh3.2 billion loss.
Shareholders gave the green light for the plan in the annual general meeting Wednesday where five new board members were also confirmed.
The firm's chief executive, Julius Kipng’etich, said that about Sh2 billion of the funds will be used to settle expensive bank loans and another Sh2 billion used to pay outstanding supplier debts.
The remaining amount will be used to fund a turnaround plan that involves opening 1,000 mini-shops and 200 express shops under a franchise model.
“All those problems you know of stock-outs, once we pay our suppliers we are back in business,” Mr Kipng’etich said.
“The finance costs (for loans) in our books you have seen is very high. Once we take out those loans, our finance costs are dramatically reduced. And then of course, the expansion strategy will be funded through that process,” he added.
The new directors confirmed are board chair Catherine Ngahu, Polycarp Igathe who is also the CEO of Vivo Energy, Louis Otieno, Margaret Kositany and Samuel Kimani.
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