Kenya: Long Wait for Uchumi

22 April 2011

editorial

Nairobi — It’s over a year since Uchumi Supermarkets was lifted out of receivership, yet investors are still getting conflicting statements on its relisting.

Management says the one-time retail giant, brought on its knees by mismanagement, has met all the pre-conditions for readmission to the Nairobi Stock Exchange.

These include, among others, a three-year profit record, capitalisation and, most important, a strong balance sheet and cashflow through equity restructuring.

Then things get fuzzy. All we know is Uchumi has applied for readmission to the Capital Markets Authority, which has been either vague or economical with details. The suspension from NSE has locked up investors’ funds since June 2006.

Shareholders have been patient for five years and this patience won’t last long. Lack of a clear way forward is likely to fuel speculation that the retailer is not healthy enough for trading at the bourse, and so its stock not worth holding.

If there’s no good enough reason to delay Uchumi’s return to the stock market, the CMA should speed up the process and unlock investments for the over 1,200 shareholders.

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