Uchumi supermarkets attendant serving customers. [Photo|the-star.co.ke]
Uchumi Supermarkets revival strategy has received a boost after the government released the second bunch of its Sh1.8 billion bailout.Henry Bett, the acting head of Marketing at Uchumi Supermarkets, told the Star on Tuesday that the retailer received Sh700 million on December 1 for restocking.“This brings the total cash received from the government to Sh1.2 billion, considering that the first Sh500 million was released in January this year. The remaining Sh600 million meant for re-entry to the Uganda and Tanzania markets will only happen when Kenya has stabilized,’’ said Bett.
The retailer recorded an after-tax loss of Sh2.8 billion in 2016.This successfully enabled the outlet to lobby for a government bailout of Sh1.8 billion to support its operations which were to be disbursed in three installments of Sh500 million, Sh700 million and Sh600 million before the end of this year.
However, the retailer is yet to give the government a clear recovery plan, an aspect that stalled the redemption process.
This comes as the retailer's CEO Julius Kipng’etich has also left the company, throwing the recovery efforts into further disarray.
According to reports, Uchumi was supposed to submit a detailed audit of how the management was going to handle the cash and a full and convincing explanation of how the money would be used to revive the company based on past experiences where state funding did not improve cash flows as expected.
Uchumi supermarket, in August this year, notified the public of a strategic investor who was to inject Sh3.5 billion in exchange for a stake within 120 days. The period lapsed unsuccessfully at the beginning of this month.