Uchumi says to settle all debts by March 31

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Andrew Dixon, the company’s COO, said the firm’s financing position was set to improve considering that it had found a potential buyer and the process to dispose of some of its property was at an advanced stage.
He said the Sh3 billion the firm expects to raise from the sale of the 20-acre land in Kasarani, Nairobi, as well as the capital injection from the prospective investor will give Uchumi the much-needed financial boost.

Retail chain Uchumi Supermarkets #ticker:UCHM is looking to fully settle all debts owed to its creditors, including suppliers by the end of March.
Andrew Dixon, the company’s chief operating officer (COO), said the firm’s financing position was set to improve considering that it had found a potential buyer and the process to dispose of some of its property was at an advanced stage.

Further, Mr Dixon said, the Sh3 billion the firm expects to raise from the sale of the 20-acre land in Kasarani, Nairobi, as well as the capital injection from the prospective investor will give Uchumi the much-needed financial boost.

“We are hopeful that the process to bring in the foreign investor aboard will take not more than 120 days beginning next year. During that period the investor will of course do the much needed due diligence and we are confident that they will come aboard given that our 19 branches are fully back to doing business,” said Mr Dixon.

Last week, Uchumi restocked 19 out of its 20 branches across the country with the intention of riding on the festive season to make a comeback in the market.

READ: Uchumi restocks 19 out of 20 branches in revival plan

The firm was not able to run the Karatina branch after a disagreement with the landlord over lease terms. The supermarket was forcibly evicted from the premises over rent arrears amounting to millions of shillings.

Mohamed Mohamed, Uchumi’s acting CEO, said the firm is in talks with the landlord to settle the dispute, but was also exploring the option of opening the branch in another building within the same town.

“The Karatina incident is unfortunate and we may be forced to look for a new location. But as it is at the moment our other branches are fully stocked with fast moving consumer goods; this is to ensure that Uchumi’s cash is not tied up.”

Mr Dixon also said that 98 per cent of the firm’s suppliers had agreed to continue the partnership with the company forced, in some instances, to first settle part of the previous debts.

He also said funds from the government were used to restock the branches and make staff payment.