By AGENCIES
THE Kenyan government has shelved plans to exit Uchumi Supermarkets and said it was in the retail chain to stay as it seeks to recoup its investments in the retail chain through dividends.
The Ministry of Trade -which holds the stake on behalf of the government-says that the government prefers to recover its investments through dividends and is also eager not to leave the retail sector in the hands of private investors including Tuskys, Nakumatt, Naivas and Ukwala Supermarkets.
The retail chain is expected to start paying dividends next year on increased profitability and analysts forecasts that Uchumi could pay a dividend of Sh1 in 2014 and Sh0.50 in 2013, which will be the first payout since 2002.
The government became the single largest investor in Uchumi Supermarkets with a 13.1 per cent stake after it agreed to convert Sh350 million of a Sh757 million debt into shares last October.
The State said then that it would exit the retail chain a year after the re-listing at the Nairobi Stock Exchange, which happened in May after it was lifted from insolvency.
“We have a long term interest in Uchumi since we moved in to save it from collapse and so far we are very happy with the progress,” Trade permanent secretary Abdulrazak Ali told Business Daily earlier.
He said the shareholding represents government’s hold on the retail segment, adding that Treasury look set to benefit from the turnaround of the retail chain.
The firm posted a pre-tax profit of Sh433 million in the year to June 2010 on revenues of Sh8.6 billion compared to a loss of 1.2 billion in 2005.
Uchumi has been on the recovery path since its near collapse in 2006, a performance that led it to pay its creditors led by KCB and PTA Bank--which had placed it under receivership.
This is what led the Capital Markets Authority (CMA) to lifts its suspension from trading at the NSE.
The regulator barred its anchor shareholders, including the government, from selling their shares within one year after the lifting of the suspension and re-listing on the NSE in an effort to cushion minority investors from erosion of share value.
Other principal shareholders are Industrial and Commercial Development Corporation and the Kenya Wines Agencies Limited (Kwal).
Its shares have share risen 113 per cent to Sh16.05 over the past six months, making it the top performer at the NSE over the period.
The retailer plans to open more stores in Kenya and expand to Uganda and Tanzania, to help it double its market value within two and three years.
It has 24 stores, 19 in Kenya, four in Uganda and one branch in Tanzania.
No comments:
Post a Comment