UGANDA – Cash-strapped Kenyan headquartered retailer, Uchumi Supermarket, has been suspended from trading it shares on Uganda Stock Exchange’s main investment market segment and the listing of the company’s shares on the official list.
According to a notice signed by the USE Chief Executive Officer Paul Bwiso, the suspension follows Uchumi’s failure to meet listing obligations.
“The suspension is on account of Uchumi’s continued failure to comply with listing obligations prescribed under the USE Fees, Charges and Penalties Rules of 2021 and the USE Listing Rules of 2021, respectively,” indicated Mr Bwiso.
Reinstatement of trading of the Company’s shares and its listing shall be after full and satisfactory fulfillment of the reinstatement conditions communicated to Uchumi in a suspension notice dated 19 July 2021.
USE did not give details of the specific obligations the retailer is charged to meet, but failure to adhere to the agreed terms agreed shall warrant the termination of its listing.
Ms Salma N Katamba, the USE business development manager, told Daily Monitor that the suspension had been necessitated to protect investors in the company as well as uphold transparency in equity markets.
“The problem of Uchumi has been its failure on disclosures of the company information and reporting obligations,” she said, noting that USE had through several notifications reached out to the supermarket on a number of issues, some of which have not been addressed over time.
“We have found it prudent to suspend Uchumi in the interest of transparency and protecting investors in the market because they have a right to know how the company is performing,” she said.
According to the reports, Uchumi was one of the first Kenyan companies to cross list on the USE, listing on the bourse on November 13, 2013 with a 265,614 ordinary shares.
While its shares had remained stable with most of the trading taking place at Nairobi Securities Exchange, the company started to experience challenges resulting from loss making and mismanagement.
Currently it has a total allocation of 30,000 shares and nine shareholders in Uganda.
“We have found it prudent to suspend Uchumi in the interest of transparency and protecting investors in the market because they have a right to know how the company is performing.”
Salma N Katamba – USE business development manager
Other than cross-listing in Uganda, the firm is also trading on the Dar es Salaam Stock Exchange and Rwanda Stock Exchange.
By 2015, Uchumi had 40 outlets including six in Uganda and four in Tanzania, before it started experiencing financial problems, mainly arising from competition and mismanagement.
The supermarket, whose assets had grown to about US$78.8m with shareholder equity standing at approximately US$38.4m by June 2014, has fallen in both value and spread, operating only three stores in Kenya by December 2020.
Recently, it announced plans to get back onto the market, saying it had got the support of the Kenyan government, which is a major stakeholder in the company.
As it fights to remain listed on the four bourses, it faces an uphill task of regaining its market which is characterised by heightened competition from both local and foreign investors.
Naivas Supermarket, one of the local retailers backed by IFC, opened its 74th branch in Githurai 44, Nairobi.
Naivas expansion comes at a time when foreign-owned rivals like Carrefour and QuickMart have stepped up opening of new branches.
Carrefour Kenya, operated by Dubai-based conglomerate Majid Al Futtaim, is set to open two branches in Kenya’s third largest city, Kisumu at the United Mall and Market MEGA.
In pursuit to get a piece of the lakeside’s growing middle-class clientele, Naivas is also setting shop at the prime Simba Club Hall which is a few metres from Carrefour’s United Mall property.
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