Nakumatt nets Sh7.7bn from 25pc stake sale

Nakumatt Holdings has announced it has found a buyer for the 25 percent stake it had put on offer to raise capital to refinance the business.

Nakumatt is said to have found a strategic investor to inject Sh7.7 billion to become the second largest shareholder in the business after the family of Managing Director Atul Shah.

Mr Shah on Wednesday told Reuters the firm was nearing completion of the deal with the funds expected sometime in February.

“We are already at final stages with the investor. We are just waiting for the money to come,” Mr Shah told Reuters.

He however did not disclose the identity of the strategic partner.

The deal lifts the lid ever so slightly on the family owned business, with the appraisal of the 25 percent stake putting the value of the regional retailer at slightly over Sh30 billion.

Nakumatt sounded the distress alarm in late October, indicating financial strain, bogged down by an unfavorable business environment.

The family run business has been one of the country’s better performing retailers, stocking its shelves with an array of international brands.

Nakumatt has also been on an aggressive expansion drive that has seen it set up operations in Rwanda, Uganda and Burundi as well as branch expansion in Kenya.

The expansion binge is seen to have stretched the retailer’s logistics chain, culminating in years of increased operational costs.

“Nakumatt is going through some financial stress. We are out looking for funds and we are restructuring,” he said.

With the fresh capital Nakumatt will be able to extend the tenor of its debts to more than five years.

Nakumatt has toyed with the idea of engaging a strategic investor since 2009 and at one point even considered listing on the Nairobi Securities Exchange.

Nakumatt operates 68 outlets spread across Uganda, Tanzania and Rwanda.