Uchumi Supermarkets is set to receive an additional Sh1.3 billion as taxpayer-funded bailout to shore up its business.
Out of this Treasury will release Sh700 million next month to support its local operations while a further Sh600 million will be disbursed at later date to offset debts the retailer owes suppliers in Uganda and Kenya.
The troubled chain in January received Sh500 million from Treasury to shore up its operations – the first tranche of an initially planned Sh1.2 billion bailout.
“We expect the next tranche (of Sh700 million) shortly hopefully in the month of April or May. There is also a third tranche (of Sh600 million) coming to support Uganda and Tanzania but under a separate package. In total the package will come to Sh1.8 billion,” said Uchumi chief executive Julius Kipng’etich on the sidelines of the retailer’s AGM held in Nairobi.
Uchumi chairman Catherine Ngahu said plans for the sale of stake to a strategic investor in bid to pull the retail chain out of the red are on course.
“The search for a strategic investor is ongoing. We have talked to a number of partners and we hope to narrow down to one,” said Ms Ngahu.
The deep-pocketed investor would be expected to inject Sh5billion in the retail chain to support its turnaround programme.
The retailer said it is mulling re-entry into Uganda and Tanzania markets where it exited two years ago.