Nairobi Securities Exchange stock:
Shares in Uchumi Supermarket Ltd (NSE:UCHM) shed 1.27% of their value on Wednesday to close the day at Sh3.90. Earlier in the day, Uchumi shares rose to a high of Sh4 but never recovered from the day’s low of Sh3.90. The day saw 7,200 shares of Uchumi traded, sharply below the stock’s daily average volume of 60,230 shares.
Jamii Bora boss reigns from Uchumi board
Resignation of a board member is not always taken positively by investors. While the management usually goes into great detail to explain the exit of a director, investors usually take those explanations with a hefty grain of salt. That may have been true in the case of Uchumi Supermarket Ltd (NSE:UCHM). The supermarket chain announced that Samuel Kimani, the CEO of Jamii Bora, has resigned from its board. For background, Jamii Bora, once a microcredit firm that has transformed itself into a Tier 3 lender, is Uchumi’s largest shareholder.
Resignation of a board member is not always taken positively by investors. While the management usually goes into great detail to explain the exit of a director, investors usually take those explanations with a hefty grain of salt. That may have been true in the case of Uchumi Supermarket Ltd (NSE:UCHM). The supermarket chain announced that Samuel Kimani, the CEO of Jamii Bora, has resigned from its board. For background, Jamii Bora, once a microcredit firm that has transformed itself into a Tier 3 lender, is Uchumi’s largest shareholder.
What did Uchumi say about the board shakeup?
Uchumi Supermarket Ltd (NSE:UCHM) said that Kimani was leaving its board to avoid potential conflict of interest. According to Uchumi, Kimani sits on the board of the Nairobi Securities Exchange (NSE), Kenya’s sole public stock market where Uchumi is listed. Because of Kimani’s position on boards of both Uchumi and NSE, he deemed it fit to exit the board of Uchumi to avoid creating friction.
Kimani will be replaced by a Jamii Bora insider called Tim Karibu on Uchumi’s board. Karibu is the COO of Jamii Bora.
Uchumi Supermarket Ltd (NSE:UCHM) said that Kimani was leaving its board to avoid potential conflict of interest. According to Uchumi, Kimani sits on the board of the Nairobi Securities Exchange (NSE), Kenya’s sole public stock market where Uchumi is listed. Because of Kimani’s position on boards of both Uchumi and NSE, he deemed it fit to exit the board of Uchumi to avoid creating friction.
Kimani will be replaced by a Jamii Bora insider called Tim Karibu on Uchumi’s board. Karibu is the COO of Jamii Bora.
Jamii Bora’s stake in Uchumi
Jamii Bora owns 15.8% of Uchumi Supermarket Ltd (NSE:UCHM)’s equity, making it the retailer’s single largest shareholder. However, Jamii Bora’s equity position in Uchumi is set to be diluted as the supermarket operator will be issuing fresh shares to a strategic investor and converting nearly Sh1.8 billion of the debt owed to suppliers to equity. The strategic investors is expected to inject Sh3.2 billion in Uchumi, but the rights issue will not allow the investor to own a majority stake in Uchumi outright. According to Uchumi’s CEO, Julius Kipng’etich, the strategic investors can own a controlling stake in Uchumi by acquiring more shares of the retailer in the open market.
Jamii Bora owns 15.8% of Uchumi Supermarket Ltd (NSE:UCHM)’s equity, making it the retailer’s single largest shareholder. However, Jamii Bora’s equity position in Uchumi is set to be diluted as the supermarket operator will be issuing fresh shares to a strategic investor and converting nearly Sh1.8 billion of the debt owed to suppliers to equity. The strategic investors is expected to inject Sh3.2 billion in Uchumi, but the rights issue will not allow the investor to own a majority stake in Uchumi outright. According to Uchumi’s CEO, Julius Kipng’etich, the strategic investors can own a controlling stake in Uchumi by acquiring more shares of the retailer in the open market.
Nairobi Securities Exchange stock:
0 comments:
Post a Comment