Nakumatt eyes to seal Shoprite deal in six months

By WINSLEY MASESE

KENYA: Nakumatt Holdings says it expects to complete the takeover of Tanzania’s Shoprite shops before August this year.

The move is expected to increase the chain’s foothold in the region and gain from a growing middle class with improved spending power.

Nakumatt Managing Director Atul Shah said negotiations are ongoing and expects the deal to be complete in the next six to eight months.

The deal involves the takeover of three Shoprite outlets — one in Arusha and two in Dar es Salam, estimated at Sh4 billion.

The buyout of South Africa’s Shoprite will be Nakumatt’s latest acquisition after it took over four Woolmatt Supermarkets outlets in Nairobi in March 2010 at about Sh400 million.

Nakumatt, Kenya’s leading retail chain, plans to fund the aggressive expansion drive using proceeds of an impending sale of the retail chain’s 25 per cent stake to a strategic investor. Shah said many investors are looking at Kenya and the East Africa region and the firm is looking at them to invest into the firm. As part of its expansion strategy, investors are expected to inject between Sh1.7 billion and Sh4.3 billion ($20-50 million) in the next few months to accelerate its growth.

Shah said efforts to expand into South Sudan, Juba have been put on hold due to the ongoing fighting.

Nakumatt, which runs 45 stores in East Africa including Rwanda and Uganda, has crafted an ambitious expansion plan that should see it venture into more African markets in the medium term. Some of the key markets the supermarket is eyeing include Burundi, Zambia, South Sudan, DRC, Nigeria, Botswana and Malawi.

Commitment

Shah said this when he received a cheque from Mayfair Insurance Company as part of the compensation for losses incurred during the Westgate Mall terrorist attack in 2013.

The payout of Sh611 million will play a significant role in the company’s recovery efforts following the losses incurred. The payment is the second tranche after the company received Sh400 million from the insurer last year, bringing the sum total to over Sh1 billion.

 “This is the kind of gesture and commitment that has given us the full confidence of recovering from the losses and continue with our operations,” Shah said of the compensation.

Mayfair Insurance Company Managing Director Tushar Shah said the payout underlies their commitment to ensure that companies recover from setbacks suffered as a result of incidents covered against.

“We are committed to fully settling this claim in the shortest time possible,” assured Tushar. During the incident, Nakumatt incurred losses worth more than Sh2 biillion.