A section of the Naivas Capital Centre outlet. PHOTO | SALATON NJAU | NMG The International Finance Corporation (IFC) is set to acquire a minority stake in retail chain Naivas International Limited for $15 million (Sh1.5 billion).
The global financier is part of a consortium of investors, including PE fund Amethis Finance, that will provide billions of shillings to Naivas, which is controlled by the Mukuha family.
IFC, which is the World Bank’s private lending arm, will enter Kenya’s retail sector where the collapse of one of the major players in recent years has left a gap.
“IFC seeks to make an equity investment alongside Amethis which will result in a minority stake in the company,” IFC said in a disclosure.
“Naivas is majority owned by the Mukuha family who as part of this transaction will dispose part of their shareholding to a special purpose vehicle owned by IFC, Amethis and other co-investors. The Mukuha family will remain in the business as the main shareholders.”
The specific stakes to be held by IFC, Amethis and other investors was not immediately clear.
The new capital injection is earmarked for expansion in the highly competitive local supermarket business that has attracted major players including the Majid Al Futtaim-backed Carrefour franchise.
“Through the proposed investment, IFC is expected to help the company optimise business operations and further strengthen its corporate governance structures,” IFC said.
“IFC will provide a food safety advisory programme that will ensure that the company complies with the Global Good Agriculture Practice (GGAP) that is more stringent than local standards.
IFC will also help the company improve environmental and social (E&S) standards across its operations.”
Naivas is one of Kenya’s leading supermarket chains, with more than 60 stores nationwide. It was established over 30 years ago by the Mukuha family. South Africa’s Massmart It became one of the top three retailers after the collapse of Nakumatt, which had dominated the sector.The dissolution of the Nakumatt business has also created an opening for other international retailers, including France’s Carrefour and South Africa’s Shoprite.Naivas recently outbid rivals to acquire six stores from the collapsed Nakumatt Holdings, paying Sh422 million in the transaction. It has been expanding aggressively in the local market in the past decade.In 2013, South Africa’s Massmart was seeking to buy a majority stake in Naivas, but the deal collapsed following a shareholder row in the family-owned supermarket.Massmart, which is owned by the world’s biggest retailer Wal-Mart, had planned […]
