sparkly wrote:mkonomtupu wrote:Gatheuzi wrote:sparkly wrote:www.businessdailyafrica.com/Corporate-News/Uchumi-acquires-Dar-supermarket-in-growth-drive/-/539550/2509572/-/24g47z/-/index.html
Uchumi on an acquisition spree.
While Shoprite is exiting TZ.
They have not paid suppliers in Kenya.
They have taken loan of KES 600m from KCB.
Acquisition was financed by debt.
Rights issue to expand into small and insignificant markets of Rwanda Burundi.
Shareholders should be very afraid... Insolvency 2.0 coming soon.
A loan at 18% interest from KCB. And another 405M from Coop bank. That means close to 200M per annum will go in payment of interest leave alone the principal. I wish they were applying the rights to reduce these expensive loans. We have bonds, so why not consider such or place a commercial paper
What insolvency
? if your annual turnover is 14 billion, your annual profits 400 million, and you are borrowing 1 billion secured by 2.2 billion assets. Stop fearing leverage.
If your suppliers have claims to your 2.2B assets and you only get 2.85% return from your 14B turnover, then you have a problem.
Aiii wee mboss... in retail you look at credit lines in most suppliers tell you lets put this on the shelf once sold pay us. Anyway looking at the IM Uchumi paid 675m to GoK and 956m to KCB and PTA banks without default or insolvency.
Management says "with benefit of hindsight, the management now observes strict controls on debt management" You can see this from the fact that the ICDC loan of 300m about 109m has been paid and balance outstanding at 191m
KCB overdraft of 200m and short term of 600m- 150m repaid balance of 650m
Now turning to Tanzania, sales grew
10%. The TZ economy grew at 7% in the last 2 years and the formal retail penetration is less than 10%. Now that's huge potential even if it was to get to Kenya's 30% penetration.
Uchumi shareholders
you will make me rich again