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Nakumatt plans to list on regional stock markets

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Nakumatt plans to list on regional stock markets

A Nakumatt store in Entebbe, Uganda. The supermarket chain has announced plans to list on regional bourses. FILE PHOTO 

By David Herbling Monitor correspondent

Posted  Friday, August 22  2014 at  01:00

In Summary

Move intended to give investors chance to own region’s biggest retailer

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NAIROBI

Nakumatt Supermarket has announced plans to list on the Nairobi Securities Exchange (NSE) and neighbouring stock markets within the next three years, offering investors a chance to own a piece of the region’s biggest retailer valued at $400 million (Shs1 trillion).

The retail chain has also said it will sell a 25 per cent stake within the next six to 12 months to fund growth.
Nakumatt had announced suspension of talks with strategic investors following the Westgate Mall attack last year that destroyed its most lucrative branch, but now says it has re-opened negotiations to sell part of the business.

“It is instructive to note that given that we are now considering to sell an equity stake (and not strategic investment), the stake in consideration will be significantly less than 25 per cent,” Nakumatt managing director Atul Shah said in a statement.
“We are also progressively putting in place the requisite structures and systems to facilitate the cross-listing of Nakumatt at the regional bourses in the next three to four years,” he added.
Going by the retailer’s current valuation revealed in October, an investor buying a quarter of the retailer would have to pay about Shs259 billion.

Mr Shah said the listing by introduction will be done at the NSE as well as at the Kampala, Dar es Salaam and Kigali bourses.
Kenyan retailers are currently seeking funding for expansion into neighbouring countries including the relatively under-developed South Sudan and Burundi, which have largely informal retail markets.
Nakumatt said negotiations for sale of the minority stake will be complete by August next year.

“We should be in a position to close such talks in about 6-12 months,” Mr Shah said, adding that foreign investors eyeing a piece of the local retail market have been courting the supermarket chain.
Nakumatt supermarket chain faces growing competition from rivals Tuskys, Naivas and Uchumi.