Nakumatt Holdings Ltd., East Africa’s biggest retail chain outlets, expects a “strategic” investor to buy a stake by mid-2015 as it looks to expand in the region, the head of strategy and operations said.
The company, with annual sales of Shs1.7 trillion ($600 million), has held talks with at least two “serious investors” who have shown an interest in partnering with Nakumatt, Mr Thiagarajan Ramamurthy, the regional director of Nakumatt Holdings, said in an interview yesterday in the Kenyan capital, Nairobi.
Nakumatt has 7,000 employees and 38 branches in Kenya. It also has operations in Uganda, Tanzania and Rwanda and plans to expand into South Sudan and Burundi.
The company said in August it plans to sell a 20 per cent stake after announcing last year it’s seeking to raise as much as Shs138 billion ($50 million) in a possible partnership with other retail chains.
“We are looking for both a financial and strategic investor to partner with,” he said. “We are currently assessing the right partner and the deal should be through by mid-next year.”
Kenya, East Africa’s biggest economy, is expected to grow by 5.7 per cent in 2015 and 6 per cent the year after, compared with 5.1 per cent this year, according to a Bloomberg survey of economists published in November.
The retail industry in East Africa is “attractive” because of its rapid population increase, urbanisation, macroeconomic stability and growth potential, A.T. Kearney, the Chicago-based consulting firm, said in March.
Nakumatt competes with Uchumi Supermarkets Ltd., the biggest publicly traded retailer, and closely held Tuskys and Naivas Ltd. Wal-Mart Stores Inc. (WMT)’s South African unit, Massmart Holdings Ltd.
Ramamurthy declined to identify the investors Nakumatt has spoken to and wouldn’t say how much the company plans to raise. “The talks are still under discussion,” he said.
The company is also considering trading its shares on the Nairobi Securities Exchange by the end of the decade, he said.
“We plan to list in the Nairobi Securities Exchange most probably in 2020,” said Ramamurthy.
Nakumatt last week said it expects sales in the current holiday season to grow by 30 per cent from a year earlier as consumer confidence returns after Islamist militants attacked a Nairobi shopping mall last year.
A Nakumatt superstore was the flagship shop at the upscale Westgate mall, where gunmen with the al-Qaeda-linked al-Shabaab group killed at least 67 people in September last year.
SOURCE: Daily Monitor