Cash-strapped Kenyan retailer, Nakumatt is set to receive $75 million from a foreign investor to service its mounting costly debt and to settle suppliers, which have weighed down its operations.
The unnamed investor would hold a quarter of the company if the deal closes, valuing the overall business at $310 million. The cash injection will off-set part of the $180 million in costly short-term debt the retailer owes to local banks.
Nakumatt also announced a corporate restructuring program which will see former Tesco executive Andrew Dixon join its ranks as chief marketing officer. Dixon is a British retail veteran of 30 years experience who developed some of Tesco’s leading initiatives over the last 20 years. These include the Tesco Health & Beauty in-store concept, Tesco’s core private label brands, the Tesco Express convenience store format and also managed the Tesco Clubcard, the largest loyalty program in Europe.
Nakumatt managing director Atul Shah said the investment deal was at the penultimate stage and was only waiting for the $75 million to hit its account. The family-owned retailer, the largest in East Africa with 63 outlets in Kenya, Rwanda, Uganda and Tanzania, has struggled to pay suppliers, with its Uganda outlets experiencing stock-outs in recent months.
Despite Nakumatt’s difficulties, there is still much interest in retailers in in the region given the growing numbers of middle class consumers.