Uchumi narrows in on strategic investor

Two investors are in the running to pump in Sh5 billion into Uchumi to help turnaround its flailing fortunes.

Uchumi boss Dr Julius Kipng’etich said he expects the much needed injection of capital will be made by august.

Uchumi has been struggling to get back to profitability after a run of mismanagement, left the retailer on the brink of collapse.

“Everything has already been set. The reorganization of the balance sheet by selling noncore assets is already underway and the process of inviting a strategic investor has come to the tail end,” Dr Kipngetich said in an interview.

The 41 year old retailer has liabilities to the tune of Sh6.1 billion against assets worth Sh5.8 billion. Suppliers have already agreed to convert Sh1.8 billion owed to them into equity, further giving the retailer headroom.

The government has also committed Sh1.2 billion as bridging loan to finance Uchumi’s turnaround.

The plans however hinge on a ruling of the wind up petition filed by seven suppliers seeking to recover Sh300 million from Uchumi

Dr Kipng’etich said the injection of fresh capital will breathe a new lease of life, even in the face of mounting competition from the likes of Tuskys, Nakumatt and international chains such as the Game and Carrefour.

“Uchumi will compete once it is fully capitalized. We believe Uchumi has potential and a future,” he said.

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