Capital Markets

Uchumi names advisors ahead of cross-listing, rights issue

Uchumi Supermarkets has appointed transaction advisors for the planned cross-listing in Rwanda, Uganda and Tanzania and subsequent rights issue  expected by the end of the year.

Uchumi CEO Jonathan Ciano said when announcing names of the transaction advisors on Tuesday that the rights issue cash will be used to finance its expansion plans, allowing the retailer room to pay dividends to shareholders.

Faida Investment Bank was named the transaction advisor and sponsoring broker, Equity as the receiving bank, and Hamilton Harrison & Mathews Advocates as legal advisor. Ernst &Young were appointed reporting accountants.

Uchumi is yet to settle on the target funds it seeks to raise from the rights issue.

However in the disclosure to shareholders tabled at the December 2012 AGM the retailer stated target was Sh1.5 billion.

READ: Uchumi casts net wider in Sh1.5bn rights issue plan

“The issue of money will be determined by our appetite for growth and dictated by the market price at that particular time. Even if we got Sh2 billion we still have an appetite for more,” said Mr Ciano.

Uchumi will issue an additional 100 million ordinary shares in the rights issue, whose pricing will be determined by the market rate of the company’s share around the time of issue.

The funds raised will also be used for refurbishment of existing branches.

The retail chain plans to open 13 new branches in the next one year, as well as venture into Rwanda and South Sudan.