‘Uchumi Kampala won’t shut down’
Jun 02, 2006
UCHUMI Supermarkets (U) Limited will not close down as a result of the receivership of its parent chain in Kenya, a top official said yesterday.
By Reuben Olita and Stephen Ilungole
UCHUMI Supermarkets (U) Limited will not close down as a result of the receivership of its parent chain in Kenya, a top official said yesterday.
This is despite it being 100% owned by Uchumi Kenya Limited.
David Njenga, the Uchumi Uganda country manager, said in an interview that Deloitte & Touche, the receivership managers, had confirmed that the clousures in Kenya would not affect Uganda operations.
“The entity that is under receivership is Uchumi Kenya Limited. It has no connection with Uchumi Uganda Limited. The Uganda operations are independent of Uchumi Kenya Limited.
“We may have small disruptions but we want to assure our suppliers and customers that we will not be affected in anyway.
Uchumi Uganda is a profit-making organisation. We have made profits for two consecutive financial years. This is a complete different entity. We have never received any funding from Kenya. We manage and control our own affairs,†Njega said.
Njenga said their suppliers had reaffirmed their continued commitment to do business with Uchumi Uganda.
Kenya’s leading chain store, Uchumi Supermarkets, went under receivership on Friday due to financial constraints.
Njenga said the problem in Kenya had been poor sales, which he said could not sustain operations.
p indefinitely.
He said the business had various hurdles in the daily trading and non-trade creditors.
Uchumi Kampala branch top officials said they would continue operating normally.
“This is attributed to cashflow constraints, a decline in its top line and erosion of its market share,†said Smith.
“It’s with this in mind that the board is of the view that the business is operating on a negative balance sheet,†he said.
The move caught 1,700 employees by surprise as their fate hangs in balance, unless the Government steps in to rescue the situation.
Last year, Uchumi seconded Smith, a South African to put the chain on its feet.
Trading in the chain’s shares on the Nairobi Stock Exchange was also suspended on Friday by the Kenya Capital Mraket Authority.
The closure comes barely six months after the chain floated shares, fetching Ksh1.2b.
At this point, many had hoped the chain would turnaround its fortunes.
But Smith said the restructuring programme had failed to bear fast anticipated fruits.
The board, he said, had noted that the chain was facing insolvency and the closure was meant to stem further losses.
“As a publicly listed company, we are obliged to inform all the stakeholders on the performance of our business after exploring all alternatives,†he said.
The Uchumi board hinted that it may turn to its lenders for bailout.
Smith allayed fears of job losses among its 1,700 workers, saying the move was meant to address the long-term view of the business.
He said the restructuring was hinged on cutting costs, disposal of non-strategic assets, raising additional capital and optimising its service delivery and inventory.
“The measures have partly succeeded in stemming the losses,†he said.
UCHUMI Supermarkets (U) Limited will not close down as a result of the receivership of its parent chain in Kenya, a top official said yesterday.
This is despite it being 100% owned by Uchumi Kenya Limited.
David Njenga, the Uchumi Uganda country manager, said in an interview that Deloitte & Touche, the receivership managers, had confirmed that the clousures in Kenya would not affect Uganda operations.
“The entity that is under receivership is Uchumi Kenya Limited. It has no connection with Uchumi Uganda Limited. The Uganda operations are independent of Uchumi Kenya Limited.
“We may have small disruptions but we want to assure our suppliers and customers that we will not be affected in anyway.
Uchumi Uganda is a profit-making organisation. We have made profits for two consecutive financial years. This is a complete different entity. We have never received any funding from Kenya. We manage and control our own affairs,†Njega said.
Njenga said their suppliers had reaffirmed their continued commitment to do business with Uchumi Uganda.
Kenya’s leading chain store, Uchumi Supermarkets, went under receivership on Friday due to financial constraints.
Njenga said the problem in Kenya had been poor sales, which he said could not sustain operations.
p indefinitely.
He said the business had various hurdles in the daily trading and non-trade creditors.
Uchumi Kampala branch top officials said they would continue operating normally.
“This is attributed to cashflow constraints, a decline in its top line and erosion of its market share,†said Smith.
“It’s with this in mind that the board is of the view that the business is operating on a negative balance sheet,†he said.
The move caught 1,700 employees by surprise as their fate hangs in balance, unless the Government steps in to rescue the situation.
Last year, Uchumi seconded Smith, a South African to put the chain on its feet.
Trading in the chain’s shares on the Nairobi Stock Exchange was also suspended on Friday by the Kenya Capital Mraket Authority.
The closure comes barely six months after the chain floated shares, fetching Ksh1.2b.
At this point, many had hoped the chain would turnaround its fortunes.
But Smith said the restructuring programme had failed to bear fast anticipated fruits.
The board, he said, had noted that the chain was facing insolvency and the closure was meant to stem further losses.
“As a publicly listed company, we are obliged to inform all the stakeholders on the performance of our business after exploring all alternatives,†he said.
The Uchumi board hinted that it may turn to its lenders for bailout.
Smith allayed fears of job losses among its 1,700 workers, saying the move was meant to address the long-term view of the business.
He said the restructuring was hinged on cutting costs, disposal of non-strategic assets, raising additional capital and optimising its service delivery and inventory.
“The measures have partly succeeded in stemming the losses,†he said.