Kenya oldest retail chain Uchumi Supermarket said Saturday it had received approval from Rwanda's regulatory authorities to cross-list its shares at the Rwanda Stock Exchange.
Uchumi CEO Dr Jonathan Ciano said the retailer would make its shares available at the Rwanda Stock Exchange in the next few weeks, adding that trading on that market would encourage Rwandans to have a sense of ownership of Uchumi.
"Uchumi will be among the few listed securities in the Rwanda capital market which is great for us. It will also give us the visibility that we and our customers need. Our objective is to make Uchumi a business that is owned, managed and supported by East Africans," Ciano said in a statement issued in Nairobi. He said the approval was received from Rwanda's Capital Markets Authority (CMA) and the Rwanda Stock Exchange (RSE).
ENTRY INTO SOUTH SUDAN
Ciano said listing Uchumi shares in Rwanda will help in the development of the capital market in that country, at the same time providing an investment opportunity to thousands of Rwandese due to the convenience of investing in the company without having to coming to Kenya. The development comes as the retail chain is also preparing to enter South Sudan and Rwanda in the next two and a half years.
Last month, Ciano said the new stores are part of the strategy to have presence in the eastern Africa region where it already has presence in Kenya, Uganda and Tanzania. "South Sudan is currently going through challenges but our strategy is to have branch by the end of two and a half years," Ciano said when the company announced its financial results for the 2012-2013 financial year.
Uchumi recorded a profit before tax of 5.5 million U.S. dollars (Sh475.8m) up from 4.6 million dollars (Sh397.9m) posted last year, a 20 percent increase. The company has been on a growth trajectory since 2006, when it was declared insolvent.
CMA's Executive Director Robert C. Mathu said the regulating body had put in place sufficient infrastructure and the requisite listing and trading rules to facilitate the process. "The Board of CMA has approved the cross-listing of 265,426,614 ordinary Uchumi shares of par value Ksh5.00 each on the Rwanda Stock Exchange," said Mathu.
He is optimistic that listing of Uchumi shares on the Rwanda Stock Exchange would pave the way for similar Rwanda companies to participate in the security market as well as enhance public awareness about financial products.
Uchumi is also seeking approvals to cross-list on the Uganda Securities Exchange and the Dar es Salaam Stock Exchange ahead of the planned right issue expected to be completed before close of year.
"We have also made submissions to these securities exchanges and the country capital markets regulators and we are upbeat we will obtain approvals to cross list in these markets soon," Ciano said.
The retailer will be seeking additional capital through a rights issue to finance its regional growth and expansion program as the company seeks to consolidate its position in the markets.