Black Affairs, Africa and Development
Nakumatt Seeks Foreign Investment For $14m East Africa Expansion
Nakumatt Holdings Ltd, a Kenyan supermarket chain, has began talks to sell almost a quarter of its shares to foreign investors to aide its expansion plans across East Africa.
The retail chain indicated last April that it would commence talks in June over plans to bring on board foreign investors, after buyout talks with a consortium led by London-based private equity firm, Satya Capital, collapsed.
The regional director for strategy and operations, Thiagararajan Ramamurthy, has now confirmed the discussions, explaining that the chain will seek to partner willing investors to raise cash for its expansion projects.
“There are quite a few global players very keen to partner with us and we are still at initial stages of discussions,” Mr Ramamurthy told the Business Daily on Wednesday.
The proceeds are expected to fund its Sh1.2 billion ($14 million) East African expansion drive, which will see the chain open 8 new outlets between October and February in Djibouti, South Sudan and Burundi, as it eyes a 15.3 percent growth in revenue.
According to Business Daily, the holding company would rather attract equity investment than seek to pursue costly bank loans, and does not intend to list on the Nairobi Stock Exchange (NSE) in the short term.
Analysts, led by Citigroup, have pinpointed East Africa as the leading destination for global retailers, in terms of growth frontiers, and investors interested in financing retail business ideas.
The retail giant, which was ranked 3rd in the 2012 top 100 supermarket chains by Top100Arena, has 37 stores across Kenya, Uganda, Rwanda and Tanzania, with a staff base of over 4,000 people.