Uchumi looks to banks for support to boost recovery operations

Uchumi eyes banks’ support to boost recovery operations

Pic: Restocked Uchumi supermarket Sarit centre outlet shelves in Nairobi on December 21,2017.Photo by Enos Teche.

Cash strapped Uchumi Supermarket is banking on Short term funds from financial institutions in the country to boost its human capital and boost operations.

In a one on one interview with the Star, Uchumi chief executive Mohamed Mohamed said He has to satisfy the human capital first for him to achieve his strategy of restoring Uchumis lost glory.

“ I am pursuing several channels of financing such as stop gap measures, short term fundings from financial institutions which is where am talking to people like Kenya Commercial Bank, Nairobi Securities Exchange…,” Mohammed said, adding that “ even when the strategic investor comes on board it will take a while before the process is complete and I still have to pay salaries , buy stocks and pay landlords.”

Apart from KCB, its annual report shows that they seeking support from United Bank of Africa and NIC Bank.

The expected strategic investor is expected to pump in Sh5 billion. Also an extra sh3.5 billion is expected from an unknown potential investor through the issuance of new shares.

“Engagements are ongoing and the Board is confident that the transaction will eventually be completed,” Mohammed says in their annual report.

As at last month, the government owned retailer had not paid its workers for atleast three months, according to Kenya Union of Commercial, Food and Allied Workers.

In its latest annual report for the year ending June 30, 2017 the retailer announced having a total of 1,446 employees down from 2,317 employees recorded in 2016.

Online Shopping

As international players such as Careffour , the Game and Shoprite flock the Kenyan market, Uchumi intends to re-locate some of its branches to areas that are less saturated.This is in addition to launching an e-commerce platform to be tested next month and be officially launched in the third quarter.
The platform is part of the retailer s plan top reduce its operational expenditure.

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