Uchumi To Evaluate Property Sale Offers
UCHUMI Supermarket’s board meets tomorrow to evaluate bids for the sale of two of its prime commercial properties in Nairobi, chief executive Julius Kipng’etich said yesterday.
This follows conclusion of a tender floated last month which closed on October 30.
On sale is the Ngong Road property, popularly known as Ngong Hyper
covering 2.5 acres of land and Lang’ata Road premises (Lang’ata Hyper) sitting on 3.7 acres, in a sale-and-lease-back deal.
The Capital Markets Authority approved the planned sale in September, a move the supermarket is banking on to boost its cash flow.
“I don’t want to pre-empt what will be discussed on Thursday. We will give more information after the board has met but what I can say is that we need liquidity for paying suppliers,” Kipng’etich said on phone.
The retailer has contracted the Nairobi law firm Coulson Harney to oversee the transactions.
The supermarket is also planning to sell a 20–acre land parcel piece in Kasarani valued at about Sh3billion. Kipng’etich said this will be pursued later.
“Not now. It will wait for AGM (Annual General Meeting)” he said.
The asset disposal is part of the retail store’s turnaround strategy which so far has seen it pull out of Uganda and Tanzania, close non- performing branches in Kenya and lay off staff.
Kipng’etich replaced former boss Jonathan Ciano who was fired in June alongside chief finance officer Chadwick Okumu following massive supply problems at the retail chain, in what the board termed “gross misconduct and negligence”.
This was after Uchumi posted a half-year (2014-15) loss of Sh262.3 million compared to a net profit of Sh106.9 million recorded a year earlier, after months of deteriorating business caused by under-stocked outlets.
The supermarket owed suppliers Sh2.2 billion debt which according to the new boss has been reduced by more than Sh500 million.
Source: the star