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Uchumi - A value play?
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streetwise
#91 Posted : Monday, January 19, 2015 4:59:48 PM
Rank: Veteran

Joined: 6/23/2011
Posts: 1,740
Location: Nairobi
I think they need to buy some of the small players like quickmart to be shown how the business in done
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Gatheuzi
#92 Posted : Monday, January 19, 2015 5:35:25 PM
Rank: Veteran

Joined: 8/16/2009
Posts: 994
Kihara joni wrote:
Uchumi's stores are somehow rundown not well stocked and in some funny areas, but saw a small store coming up in Limuru town.

As they prepare that small store in Limuru, a mega Tuskys is coming up. You can guess who will succeed here.
Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Gatheuzi
#93 Posted : Tuesday, June 16, 2015 6:52:27 AM
Rank: Veteran

Joined: 8/16/2009
Posts: 994
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 d'oh! d'oh!? 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.

The KCB loan is one year loan.

If they get rights cash which goes to working capital then this one is a butterfly. Uchumi shareholders should support the rights if they want it to fly.
Material disclosure: I own zero shares here


7 months later suppliers owed Kes1b. Uchumi to dispose non-core assets to raise Kes2B.

read more here
Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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VituVingiSana
#94 Posted : Tuesday, June 16, 2015 10:57:00 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
Gatheuzi 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 d'oh! d'oh!? 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.

The KCB loan is one year loan.

If they get rights cash which goes to working capital then this one is a butterfly. Uchumi shareholders should support the rights if they want it to fly.
Material disclosure: I own zero shares here


7 months later suppliers owed Kes1b. Uchumi to dispose non-core assets to raise Kes2B.

read more here

@Gatheuzi 1 - 0 @Mkokomtupu ... BUT MM said he has no shares in Uchumi. That's like the KQ CEO (former & current) who defend KQ's deteriorating position with glee & fire while they have zero skin in the game but making $1,000,000/year!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mlennyma
#95 Posted : Tuesday, June 16, 2015 11:17:19 AM
Rank: Elder

Joined: 7/21/2010
Posts: 6,194
Location: nairobi
And this banks really know where to fish,but my surprise is how wazuans here are able to see ceo's running down companies earlier than the boards.
"Don't let the fear of losing be greater than the excitement of winning."
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VituVingiSana
#96 Posted : Tuesday, June 16, 2015 11:57:06 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
mlennyma wrote:
And this banks really know where to fish,but my surprise is how wazuans here are able to see ceo's running down companies earlier than the boards.

Wazuans are consumers of the products & services.

When we see dirty supermarkets without products... we know other customers do too... and shop at Nakumatt or Tuskys.

When we experience petrol stock-outs at KK or Total... we know other customers do too... and fuel at Shell.

When we experience flight delays on KQ... we know other customers do too... and fly with 540 or Ethiopian.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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maka
#97 Posted : Tuesday, June 16, 2015 11:58:32 AM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
VituVingiSana wrote:
mlennyma wrote:
And this banks really know where to fish,but my surprise is how wazuans here are able to see ceo's running down companies earlier than the boards.

Wazuans are consumers of the products & services.

When we see dirty supermarkets without products... we know other customers do too... and shop at Nakumatt or Tuskys.

When we experience petrol stock-outs at KK or Total... we know other customers do too... and fuel at Shell.

When we experience flight delays on KQ... we know other customers do too... and fly with 540 or Ethiopian.


So true...
possunt quia posse videntur
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mkonomtupu
#98 Posted : Tuesday, June 16, 2015 12:10:25 PM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
VituVingiSana wrote:
Gatheuzi 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 d'oh! d'oh!? 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.

The KCB loan is one year loan.

If they get rights cash which goes to working capital then this one is a butterfly. Uchumi shareholders should support the rights if they want it to fly.
Material disclosure: I own zero shares here


7 months later suppliers owed Kes1b. Uchumi to dispose non-core assets to raise Kes2B.

read more here

@Gatheuzi 1 - 0 @Mkokomtupu ... BUT MM said he has no shares in Uchumi. That's like the KQ CEO (former & current) who defend KQ's deteriorating position with glee & fire while they have zero skin in the game but making $1,000,000/year!


First if you went through the thread you will notice I put my skin in the game and took in a leveraged position but technical analysis showed the price had overrun my targets in Jan so I took my capital gains. That's why I keep saying buy and hold is poor strategy.

Secondly I think the strategy of selling assets to settle suppliers is a total unmitigated disaster. Those damn suppliers give uchumi the worst trading terms so why reward them with the company's best assets. Uchumi assets that can bring 2 billion are the ngong road hyper and langata branches. Ngong road is being expanded I would think it would make sense to hold on to the properties.

Thirdly it's not wise for the new guys on the board want to burn the granary to get rid of the rats. It's okay they may have a strategic partner in mind but there are playing their cards the wrong way. In a game of poker you don't show your hand.

Lastly I did post sometime back that it was disaster for uchumi to have paid cash dividends a bonus issue would have preserved working capital but in the words of Buffet the market helps those who help themselves. I made my gains, i preserved my capital and I move on the next game. Ni hayo tu
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VituVingiSana
#99 Posted : Tuesday, June 16, 2015 12:37:10 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
@mkonomtupu - Good points.

1) Buy & Hold is a great strategy. It does not mean never sell. That's a misconception. It is not based on 'technical analysis' but fundamental analysis which clearly showed Uchumi was going down the crapper. Either way, for now, both turned out a-OK for those who sold out. And you told folks you have no shares which is different from non-disclosure.

2) Selling 'good' assets isn't a good idea but selling under-performing assets is OK. That said, I think some assets are under-performing because of poor management. One man's wine is another man's poison. We often see premises/businesses changing hands & thriving in new hands.

3) The granary has nothing but rats. And even the rats on this sinking ship had started fleeing.

4) WB says a firm should not retain cash unless the firm can increase/grow the value of the cash substantially. Expansion for expansion's sake is not kosher. I think the cash dividend was a PR stunt. You did the right thing by bailing out. I did the same in KQ. I made a huge loss but a far lesser loss than I would have had today. If anything, the KQ cash was reinvested into far better yielding positions.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#100 Posted : Tuesday, June 16, 2015 1:30:34 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
My mantra - https://www.youtube.com/watch?v=Jj4nJ1YEAp4
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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