Uchumi supermarket shares return to trade at the bourse next Tuesday
Uchumi supermarket company secretary Pauline Kimotho address shareholders during the 30th AGM held at the KICC on April 21 2011. The Supermarket shares will resume trading at the Nairobi Stock Exchange on May 31, bringing relief to the shareholders whose stock was locked out four years ago. File photo
Uchumi Supermarket shares will resume trading at the Nairobi Stock Exchange on May 31, bringing relief to the shareholders whose stock was locked out four years ago.
It will be a triumph for the retail chain that shook-off receivership imposed in June 2006 after it failed to meet its financial obligations.
The management will hold a shareholders briefing today, a precusor to the return to trading next week.
According to estimates, the suspension locked up to Sh2.6 billion owned by about 12,000 shareholders (calculated at Sh14.50 which was the last trading price at NSE before it went under).
Uchumi Supermarkets edged closer to returning to NSE in March 2010 after the final plan of lifting it from technical insolvency was approved.
During its Annual General Meeting last year, suppliers and shareholders agreed to convert their debenture into equity. The government also announced that it would restructure its loan to be repaid over a longer time and convert part of it into equity.
Uchumi Supermarket chief executive Jonathan Ciano at the time said the re-capitalisation would enable it make an application to the Capital Markets Authority to be re-admitted to trade at the bourse.
The government converted Sh350 million into shares while the remaining Sh407 million was to be paid within four years.
Before the restructuring the supermarket had Sh180 million in negative share capital reserves, but after the conversion the company’s capital appreciated to Sh1.54 billion.
The company’s road to NSE has been rougher that expected even as financial results indicated a turnaround.
Uchumi doubled its after-tax profit to Sh865 million for the year ending June 30, 2010 from Sh421 million in the same period in 2009. This was a strong recovery for a company that just emerged from receivership a few months ago.
Last month, the regulator, Capital Markets Authority approved the return of Uchumi to the NSE under a set of conditions that included proof that the assets in its books had no encumbrances.
