Kenyan Govt plans to let go its shareholding in Uchumi Supermarkets

The government will exit from Uchumi Supermarkets (NSE: UCHM) once the retailer stabilises under the ongoing restructuring plan.

This is according to Trade Principal Secretary Chris Kiptoo who said the shareholding exit will come after the government recoups taxpayers’ funds pumped into the company over the years.

“We are not planning to stay for so long as shareholders of Uchumi, so once it stabilises then we will move on to something else and let it grow on its own,” said Kiptoo.

The National Treasury currently holds a 14.67 percent stake in the firm making it the second-largest shareholder after Jamii Bora Bank which holds 14.90 percent.

The government has disbursed Ksh 500Mn from the Ksh 1.8Bn bailout package offered to the retailer but insists it will carry out thorough due diligence before releasing further funds. 

“We are not adding our shareholding and we are very keen on due diligence before we disburse funds to Uchumi so that it does not get drowned again. We have a team carrying out compliance checks to assure us when we can release the next KSh1.3 billion,” said Kiptoo.

Uchumi is also in talks with a strategic investor which have been ongoing where it seeks an injection of Ksh 3.5Bn to help restock its shelves and pay some of its debts owed to suppliers and banks.

Read: 

• Troubled Kenyan retail sector could hurt entire economy
• Regulating terms of payment to suppliers is bad for the Retail Sector

The troubled retailer has been struggling with poor governance, mismanagement and cash flow issues which have nearly driven the company aground amid industry woes facing nearly all