Scangroup IPO massively oversubscribed!

Rumour mill was working overtime about the oversubscription. I heard 20%, 80% & 100% but it turns out to be 400%! The 500% mentioned in the press INCLUDES the 100% shares available...

So Scangroup could have sold over 345 Million shares vs the 69 Million they have on offer!

Unfortunately, this means most applicants will get less than 10,000 shares & as low as 1,000 shares per applicant!

KenGen, a much larger offering, was only oversubscribed by 250%.

I expect the price to rise to 15/- as the corporate buyers (Mutual Funds, Insurance Companies, etc) try to buy on the secondary market BUT they are unlikely to pay "crazy" prices!

Well, whatever those idiotic MPs think (do they?), Kenyans voted with their wallets! Most banks were not even financing this IPO yet they had a 400% oversubscription.

Let the good times roll.

We need to have another large IPO to suck up the cash. Since Kenya Pipeline Corporation & Kenya Ports Authority are showing good profits, they would be great candidates. Further these firms can benefit substantially from the additional cash to expand their infrastructure!

This expansion would benefit Kenya by improving the movement of essential goods & services thus underpining the economic growth Kenya needs.

CEOs & Managers Resign in Protest of Government Interference at East African Portland Cement!

Corporate Heroes?

Kenyan CEOs have come of age where they will resign in the face of intereference! I wish the Mr. Ole Mapelu & his managers the best!

KBC carried this story. I wonder how long the quality march on KBC will last considering the government is interfering again!

It is this blatant interference that brought down KR, KPTC among tens of firms controlled by the government. The business of business is business! The government's job is to create a an environment that fair for all & allows for businesses to thrive thus uplifting the standards of living!

EAPCC had started making large profits under Mapeyu. It was on course to expand in Rwanda & Sudan! This was growth unprecedented for them. For many years EAPCC palyed second fiddle to Bamburi but was showing its mettle!

EAPCC could have gone the same way as KQ but might end up as Uchumi! I believe EAPCC should be removed as a "parastatal" thus freeing it from the whims of government crooks!

Kituyi has been adversely mentioned in the Nation of complicity in certain shenanigans. Please no more Commissions of Inquiry on this matter! How do we find out the truth?

In 2003 the government tried to get their nominees onto KQ's board but KLM brilliantly outmanouevered them coz of shareholder support + their 26% ownership. Further KLM has the RIGHT to appoint the MD & FD. Thank heaven for small favours!

All the best to Mr. Mapelu & the managers who did the honourable thing!

Sad but true...

Rating the Management & Boards of Listed Firms on the NSE

If I am not sure or have no comment I have left the ranking "blank". I concentrated on firms that have enough info on their directors & on those that are consistently 3-stars+ in my book.

Please note the rankings do NOT reflect the movement in share prices. The movement in share prices is NOT always correlated to firm's performance in the short-term.
Example: IMHO, EABL shows a price gain that outstripped profit growth in 2005. The price has since stagnated/dropped. I expect little movement upwards UNTIL the profits catch up to the share price!

Ranking will be updated to reflect additional info or thoughts/opinions.

Rankings
0-stars (Huge one-way sucking sound from shareholders' pockets to Board+Mgmt)
1-star (Management spits a little back AFTER sucking out most of the juice)
2-stars (Minority shareholders are NOT likely to benefit much)
3-stars (They make profits but there is a niggling feeling that profits could be much higher)
4-stars (They make profits for the minority shareholders but the "majors" benefit a tad more)
5-stars (They make profits & money for ALL shareholders)

Unilever Tea - 4**** coz the weather & tea prices isn't entirely in their control. Great dividends when they make money. Management depth is good.
Kakuzi -
Rea Vipingo -
Sasini Tea & Coffee - ???? Merali controlled. Professional (not family) managers.

Car & General -Gidoomal family controlled.
CMC Holdings Ltd - 4****. Board is full of "friends" but it has done a great job in the past few years.
Hutchings Biemer - ZERO. Need I say more?
KQ - 5***** coz they are on a roll with great CEO & backing from KLM who has RIGHT to appoint MD & FD. Government can't interfere even though they have tried in the past!
Marshalls -
Nation - 5*****. Independent board & great management with superior products & services. Aga Khan firm.
TPSEA - 5*****. Independent board & great management in a challenging sector esp with insecurity. Aga Khan firm.
Uchumi - Management seems to be doing a good job BUT no financial info available. Unknown management.

Barclays - 5*****. World-class management drawn from the smartest Kenya has to offer. Great resources to draw upon if needed. It has strong results every year with a nice dividend.
CFC Bank - 4****
Diamond Trust - 5***** all the way. Aga Khan firm that has great management depth to draw on when needed.
HFCK -3***. CDC provides depth of management BUT there is political pressure even though government is a minority shareholder.
ICDCIC - 3*** coz kirubi controlled otherwise the firm profits are steadily on the way up.
Jubilee Insurance - 5*****. Conservative which is what an insurance firm should be! Aga Khan managed.
KCB - 3.5*** coz of possible government influence. I think Terry Davidson has done a great job but the best is yet to come. Will upgrade to 4**** if the government reduces its stake to less than 10%. Govt appoints CEO. I like their growth initiatives into Sudan, TZ & UG in near future.
NBK - 2** coz of government influence through the board & NSSF. The bank is also "insolvent" without the generous assistance of the NSSF.
NIC Bank - 3*** but almost a 4****. If the ndegwas relinquish substantial control & provide an independent board. The bank is miles ahead of its competition in the range & quality of services.
Pan Africa Insurance - 3***. Sanlam managed. Possible upgrade.
SCBK - 5*****. No complaints about the big banks coz they are solid firms with great earnings & dividends.

Athi River - 3***. Paunrana family control but Bamburi has board seat & influence. Entrepreneurial firm.
BOC - 4****. Well managed. BOC (soon to be Linde controlled). Profit growth is a constant!
Bamburi - 5*****. Great management. Low key but very profitable firm.
BAT - 5**** in how they handled Ngilu's arbitary but political "smoking ban" by tackling it through court & the media. Smoking & profits are back, baby! Kenya is an export hub.
Carbacid -
Crown Berger -
EA Cables -
EA Portland Cement - 1* - Ole Mapeyu & 5 senior managers resigned in the face of governmental interference. Hats off to them!
EA Breweries - 5*****. Great, smart management. Guiness controlled thus lots of experienced management depth all over the world.
Kenol -3***. Biwott controlled (75%) but professional management that has expanded the firm regionally.
KPLC -2**. The 2 stars are solely on the basis of new managers from Manitoba who are World Bank funded so not directly influenced by local politics. Needs time to upgrade.
KenGen - 2**. Will do well coz its a monopoly but not necessarily well managed. Electricity in Kenya is very expensive & visionary management would lower the cost while boosting supply. Excessive government control through is 70% ownership.
Mumias - 4****. Great show by management but government influence in Mumias is worrisome.
Olympia -
Sameer - Merali controlled.
Total - 3***. Well, they are Francais.
Unga -

A. Baumann -
City Trust -
Eaagads - 2**. Controlled by Socfinaf. Very little info available.
Express -
Williamson Tea -3***. Well managed but stingy with dividends. Its problems emanate from the nature of agriculture i.e. dependent on weather & international tea prices.
Kapchorua -3***. Williamson Tea controlled.
Kenya Orchards - This is a NEGATIVE in my book! Why haven't they been suspended from listing?
Limuru Tea - 5*****. Unilever Tea controlled.
Standard Group - 2**. Almost 3*** but their ownership is politically biased. SGL gained respect with their bold handling of (anti) government issues which led to the raid on their offices. The quality of their business reporting sucks!

Olympia Capital Holdings Ltd (OCH) releases 1H 2006 Results

The Interim 1H 2006 results were released in record time (within 30 days of the end of the Half Year) at the 2005 AGM held at Nairobi Club on July 28 2006.

The shares have been trading around the 16/- mark for the past few months.

OCH is a Holding Company & owns/controls the following:

• 100% of Dunlop Industries Ltd (DIL) which is a Kenya based manufacturer of PVC tiles & rubber solutions.
• 53% of Olympia Capital Corporation (OCC) which in turn owns 100% of Kalahari Floor Tiles (KFT) a Botswana based manufacturer of PVC tiles & rubber solutions. KFT also supplies the S.African market. KFT has a chemical division acquired in 2006 that manufactures & distributes industrial cleaning solutions.

Other Info:

• Chairman - Chris Obura
  
• CEO - Michael Matu
• 10 Million Shares in issue
• OCC is listed on the Botswana Stock Exchange
• DIL is the sole PVC tile manufacturer in the East African region
  

My comments in BLUE.

The growth in profits was limited to Kenya but generally Botswana provides the bulk of the profits.

The info is for 1H 2006 vs 1H 2005

Turnover: +9%
PBT: -1%
PAT attributable to OCH: +41% (primarily due to lower "minority interest charge")
EPS: +41%

The 1H EPS is almost the same as the entire 2005 (1.13 vs 1.14) therefore OCH can do much better in 2006 vs 2005 if they maintain the current "streak".

CEO's Commentary (per the Announcement):

During the six months under review, we did not see a significant improvement in the group profitability before tax. The key difference in the results was an improvement in the Kenyan operations where we own 100% of the equity versus a decline in the results of the Botswana operation where we own 53% of the equity.

Prior to any acquisition we expect the second half of the year to be similar to the first half.

Our Botswana subsidiary is in the final stages of making a significant acquisition in South Africa. This acquisition, if successful, will have a significant effect on the profitability of the company. We will make every effort to meet our equity funding requirements to retain majority shareholding in the subsidiary during the acquisition. We expect this acquisition to be complete during the second half of the year.

Michael Matu

The South African Acquisiton:

• The cost of the acquistion?
• Will it be accretive to earnings in 2006?
• Ownership structure?
• How much will OCC need to to acquire the SA firm?
• OCC plans to raise the funds by acquiring debt & raising equity i.e. Rights Issue
  

Since OCH intends to maintain its "control" in OCC & replace the aging Kenya DIL plant (2005 Annual Report), it will need to raise funds to fulfill both needs.

Bottomline:

OCHL's 2005 AR states that "Our aim will be to meet our rights to ensure we maintain majority shareholding in our Botswana listed subsidiary" thus raising the bar to meet funding for the DIL plant & OCC Rights. The new plant is expected to increase DIL's profitablilty.

Machines or Not? Storm in a teacup?

The numbers thrown back & forth make little sense since there is no accurate count of workers who depend on tea plucking.

Plucking tea is one of the lowest paid jobs in the formal sector but very important to the rural masses in the Central & Rift Valley regions.

COTU (thru Atwoli) has been bandying around that the introduction of te-harvesting machines could lead to a loss of 200,000 jobs!

KTGA contends they only employ 68,000 workers!

I think Atwoli is full of it but the hyperbole plays well.

What Kenyans need to reliase is that the Growers are in it for the money & the workers though low paid have great facilities (relative to the peasant tea farmer) since the "consumer watchdogs" keep an eye on the plantations.

Furthermore, Tea is no longer the beverage of choice for many. I see more Kenyans drinking sodas, caffeinated drinks & water than tea! Thus the market for tea is NOT expanding but worldwide production is soaring thus depressing the world market.

Kenyan tea is renowned for its "colour" but there are various grades of tea. Tea sold in most Western countries is blended. Unless Kenya creates a "name" e.g. Colombian Coffee, there is no point in having pricey tea that can't be sold at a premium.

James Finlay has ventured into the Green Tea market & if it can't produce quality Green Tea, it can't compete. It needs the tea harvesteing machines to ensure "freshness". This is a NEW product for Kenya.

Other countries will introduce the machines & Kenyan tea will be priced out. There will be a lot more jobs lost!

EABL had to shape up & is very efficient & growing its market.
KQ fired lots of inept employees but is now hiring while it grows exponentially.

Let the Tea Companies do their thing! I hope they can get into growth mode & provide BETTER jobs for the populace.

Uchumi Reopens but will it be re-listed?

Uchumi will have a tough time getting re-listed UNLESS the CMA bends the rules & regulations.

Nevertheless, the CMA can redeem its image by thinking out of the box by allowing Uchumi on the NSE as an AIMS (Alternative Investment Market) listing but WARNING to ALL that there are risks involved & the exceptional circumstances for the re-listing.

For the relisting, either Uchumi will have to either come out of receivership OR the shares will trade even though it remains under receivership. In the latter, the ordinary shareholders will have no say (i.e. voting rights) since the receiver has the "control".

It is not a crime to be STUPID so those who buy into Uchumi should be made aware of the risks.

Uchumi might become another NBK story i.e. just as NBK will take at least another 2 years to pay dividends (unless the government "rescues" it), Uchumi will be in the same spot. It will be a slow but necessary part of Uchumi becoming a firm capable of moving to the Main Board of the NSE.

Good news: Uchumi will not have to pay income taxes on its profits for many years & that means it gets to keep more of the cash! Nakumatt will be forced to pay income taxes considering it is profitable & under greater scrutiny. A strategic investor could shield profits by doing a Reverse takeover.

Ironically, Nakumatt will probably list in 2009 which is in line with the earliest Uchumi will be profitable. I wonder which will cause more excitement in the market?

A better option is to start shopping Uchumi to the highest bidder asap i.e. while in receivership, it is easier to negotiate the sale of a huge chunk to a strategic investor.... that could be Sameer, local outfit like Tesco (which had franchised some stores but not in kituyi's good books), foreign chain...

This would re-energize the brand while providing a "real" lifeline that puts real cash behind the name thus ensuring suppliers will fully be on board. Other "large" suppliers including Mumias, EABL, Unilever, Bidco, etc should be allowed to take up either preference shares or ordinary shares to lend the "cash" support OR convert debt into equity.

Yes, I am recommending a recapitalisation via another RIGHTS issue but restricted to corporates to keep costs low but raise the maximum asap. They could be issued a different class of shares that have preference over current shares thus encouraging the investment.

Uchumi should be allowed to float Commercial Paper esp to pay its suppliers. The suppliers earn interest while Uchumi buys time with increased cash flow. The government should do its part accept Uchumi's CP in lieu of taxes for 2 years!

Without the tough BOLD moves, Uchumi will die a slow death again...

ScanGroup IPO - July 2006

ScanGroup has posted the prospectus online on July 12 which is 5 days ahead of schedule.

Salient Points - My observations (read at your own risk & do your own research!) in Blue:

• KShs 10.45 per share. Priced to sell i.e. the price will attract many investors like the "cheap" shares solely on account of price & not fundamentals!
  
• 9 Million "new" shares will be sold to raise KShs 74 Million for ScanGroup. These funds will go to reduce debt, increase working capital & for acquisitions.
  
• 60 Million shares will be sold by the "Vendor" (Bharat Thakrar - CEO & founder) for KShs 584 Million. He is cashing out a good chunk of his shares. Plus he will still own an additional 45 Million shares after the IPO thus effectively he is a Billionaire! Our first (public) media BILLIONAIRE! Not a bad deal... This listing will open the eyes & doors for other private businesses to go public as a way to cash out.
• NAV of KShs 1.58 (Price = 6.61 x NAV) High ratio for listed Kenyan firms & there will be little left for ordinary shareholders if ScanGroup goes under! Nevertheless, in this business it is the earnings/creative talent that counts. How do you value creativity & ideas?
  
• EPS 2005 = 0.96 thus P/E of 10.88 Not cheap but in line with many other listed firms on the NSE. Was it "boosted" for the IPO?
  
• EPS 2006 (estimate) = 1.05 thus P/E of 9.95 Not cheap but in line with many other listed firms on the NSE. An estimate is just that... an estimate!
  
• AJL White (Creative Director) is not selling his shares but has "contributed" 3 Million to Bora Services (an ESOP-like structure). The shares will vest after 5 years for the benefit of Key Management. Hopefully, this will keep the Key management on board for at least 5 years. Thakrar contributed 12 Million shares towards Bora. Venkataraman contributed 3 Million shares to Bora - though he is sole beneficiary in 5 years.
  
• High dividend payout since this is not a capital intensive business. A bad year can mean reduced dividends thus the shares could be volatile.
• Management team is relatively young. Bodes well or new ideas but ScanGroup will experience poaching by other firms (thus the Bora incentive!)
• Most MDs & GMs of the subsidiaries are not Kenyan e.g. A.J.L White, S. Ambegaonkar, S. Venkataraman, M. Shah, S. Sundaram, P. Sham, etc. Why aren't there more Kenyans? Anyway, the incentive to stay on in Kenya is not as strong for expats as for Kenyan managers thus reduces the expats' loyalty to ScanGroup.
• Executive compensation (2005: KShs 25 Million) will increase substantially as the management feels they were underpaid as "owners". How much more? This also disincentivises management since lower profits does not necessarily reduce their income.
  
• Shares in the IPO: 5% reserved for employees, 45% reserved for corporate buyers & 50% for individual investors. I would have preferred all investors (corporate & individual) be treated as equals thus "spreading" the wealth. To reduce costs for ScanGroup & BT the minimum application should have been for a minimum of 1,000 shares.
  

Pros

• Promoters (Thakrar & White) will not be able to sell (except with "permission" from the Company (ScanGroup) any shares for 3 years. Even then only 25% of their shares. They can dispose of all their shares after 5 years. Note that BT+AJLW control ScanGroup so it might be "easy" to get permission from themselves!
• Key Management has incentive for prices to rise in the long-term since the value is locked in the shares' value in 5 years. Basically the higher the price in 5 years the more the Management makes! This is a HUGE incentive for the longer-term. But we do not have access to the documents thus they may be clauses that allow opt-outs.
  
• The economy is geared for growth for the next 2 years leading up to the elections. Whereas there are always chances of pre-election violence, I don't think Kenya will see it on a large-scale. Spending on ads will increase as we see American-style electioneering e.g. DSTV carried Raila's ads. The savviest firms will be used by all politicians to make themselves look good. The ads will cut across all mediums!
  
• Increased viewership on TV means slicker ads thus increased profits. The big guns can afford the fancy equipment for these ads. BTW, the smaller shops will become very competitive with falling technology prices & greater computing power. This is a very real threat to the "Production" department of ScanGroup.
  
• Regional expansion esp by multi-nationals who prefers one firm doing all the PR & marketing instead of finding new partners in each market/country. Potential is huge for ScanGroup as incomes rise in the greater E.African region e.g. Uganda, Rwanda, Congo, etc.
  

Cons

• The salaries are going to be pretty high (i.e. direct costs will increase regardless of profitability). The promoters have taken a pay rise but the new salaries are not revealed in the prospectus.
  
• Section 6.4 (ii) seems to ALLOW for INDSIDER TRADING! I would appreciate someone reading the section & providing their interpretation!

Bottomline
Buy - at least for the short-term since there is a dearth of IPOs. Expect lots of speculation but support from the underwriters.

Uchumi Supermarkets Limited (in Receivership) appoints new MD

The ball has started rolling on Uchumi's re-opening on Friday July 14 2006.

I hope that the government & parliament has learnt the need for "Restructuring" rather than Receivership & will update the Company's Act to ensure that businesses need not shut down just because they run into financial turbulence.

Back to the new MD...

Who is this Jonathan Ciano?

• was the Manager - Strategy & Restructuring at KPLC
  

What are his qualifications?
Does he have any experience in the retail sector?
Which firms has he restructured?
How are they doing after the restructuring?
Does he have any experience in FMCG?
Has he ever been a CEO?
What did he accomplish at KPLC?

Bottomline: Does he have what it takes to run Uchumi?

I expected the stakeholders (or whoever picked the MD) to have picked a seasoned retail executive like Titus Mugo (ex-USL MD) or Ajay/Vijay Shah (ex-Nakumatt MD) but I hope they have the right man for the job! After all the government (aka the tax payers) has KShs 600 Million at stake! Unfortunately, MPs don't count as taxpayers so they have little to lose!

I wonder if the major stakeholders had input into Ciano's selection coz Uchumi needs a hardworking, honest & selfless individual to regain lost marketshare. The MD should be able to get into the trenches just like Suresh Shah did in Uchumi's heydays since that is the best venue for genuine feedback from customers, employees & suppliers.

I hope Kenyans (esp customers & suppliers) support Uchumi when it reopens & in the critical months ahead otherwise the bailout will all be to naught! Kenyans' words are often louder than actions! Many Kenyans lamented Uchumi's demise while they shopped everywhere else BUT Uchumi!

Kenyans should take pride in shopping at Uchumi which has traditionally supported Kenyan suppliers & manufacturers.

I am curious.... where does kituyi shop after his rant against Nakumatt?

Finally, I wish Ciano the best!

Uchumi Supermarkets Limited (under Chapter 11 Restructuring)
Kenyan Company Laws (a throwback to colonial days) are antiquated & do not allow for an American style Chapter 11 bankruptcy/restructuring process therefore this is simply wishful thinking on my part.

Uchumi Supermarkets Limited (USL) enters into the Ch.11 bankruptcy overseen by a court to keep off unsavoury elements but being Kenya the judge could be just as unsavoury as the crooks! In addition, the judge/courts should be advised by businessmen/experts as to the suitability of any actions.

Anyway, the court initially drives the process with assistance from the current management & major creditors. The judge appoints a "team" to look into each party's claim including secured & unsecured creditors. Precedence is given to secured & larger creditors but the smaller unsecured cerditors are also given a voice. Each creditor can't have a representative but they can collectively choose someone to represent them.

Essentially a new Board of Directors is appointed with the directors being appointed by the judge though nominated as mentioned above. A CEO is chosen to head the management team.

Operational Stability - An agreement is reached as follows:

• Mastersen-Smith is retained as CEO since he is most familiar with the firm & its problems. If need be he can be replaced later on.
• Appoint new directors with retail experience e.g. a past CEO like Suresh Shah would be very useful
  
• The stores remain open & employees are retained though there may be redundancies if needed to preserve cash
• The banks agree not to foreclose on the properties. Suspend Interest
  
• Landlords agree not to evict USL. Rent abatement for 6 months
  
• Suppliers agree to continue supplying USL with generous credit terms in exchange for constant payments
  
• Suppliers who continue supplying USL get a bigger say in the running of the "new" USL
• Government (KRA & Treasury) agree to suspend collection of past due funds incl VAT, PAYE, etc with an eventual view to write these off. This is similar to a tax amnesty.
  

The above efforts will ensure USL has cashflow thus it can get back on its feet.

Financial Restructuring:

• The entities & persons who are owed funds by USL can convert them to equity even though the real value will be written-down.
• The government (KRA+Treasury) would allow these write-downs as tax write-offs.
• The uncollected VAT would be refunded asap by the KRA to the suppliers thus ensuring the suppliers don't face cashflow problems thus pushing them into bankruptcy as well
• Existing shareholders would lose value since the additional shares would considerably dilute their holdings
• Anyone willing to lend to USL should be allowed to do so as long as they are aware of the risks
  

Strategic Partner/Divestiture:

• Start a search for a strategic partner who buys out existing shareholders OR
• Find a strategic partner who will inject cash OR
  
• Sell the chain/brand
  
• Renegotiate leases & terms with the suppliers, landlords & creditors giving preference to those who helped USL survive through the tough times
• Offer a Rights Issue while CLEARLY stating that there is a high probability of failure & with specific time frames as to the estimated period before profitability is achievable. No guarantees to be issued
  
• Offer new shares restricted to the "sophisticated" investors e.g. pension funds, wealthy individuals, etc who are able to bear the risk of USL failing again
  

Uchumi Supermarkets Limited in Receivership

An employee foreshadows the fate of Uchumi?
Letter to the editor of Kenya Times 24 July 2004

Uchumi Supermarkets has had turbulent years but here is some recent information (recent to older news):

Albert Ruturi was appointed chairman snubbing naushad merali of Sameer Group. Akif Butt (SG's FD) resigns his seat on USL's board & SG dumps its stake in USL pushing the prices to a low of 12/- (post Rights Issue).

Talk on the street (aka rumours) was that the government through KWAL refused to sell its stake to Sameer Group thus thwarting SG's plans to be the anchor shareholder.

Sameer Group had purchased a 10% stake in USL (early 2006) hoping to eventually buy out 25% & take control of the chain. ICDCIC (the listed entity controlled by chris kirubi) sold its stake to Sameer Group through the NSE board. The price rises to a post-Rights high of 22/-

USL had a successful Rights Issue in 2005 where they raised almost KShs 1.2 Billion.

USL appoint new MD, John Mastersen-Smith, formerly of Spar (SA).

Thairu is fired & replaced by an acting MD, Kipn'getich Bett.

Vendors stop supplying USL as it faces a cash crunch. Loss of retail traffic as shelves remain empty.

USL burns through the accumulated cash that Suresh Shah had carefully built up on an ill-conceived expansion plan that used short-term funds to fund long-term expansion. Various suspect leases for new premises were entered into that were done with "related" parties. Haco Indutries (kirubi-controlled) becomes a major USL supplier.

East African article about a "lost Uchumi"

Titus Mugo is fired in Nov 2000 & replaced by Kennedy Thairu (a kirubi appointee) as MD in 2001. Article justifying Shah's & Mugo's ouster from Market (Un)Intelligence.

chris kirubi takes effective control of USL through shareholdings held by himself, ICDCIC (kirubi-controlled) & other kirubi-controlled firms.

kirubi - supplier, vendor & buyer - did he eat his cake & have it too?

Titus Mugo (long serving deputy MD under Suresh Shah) becomes MD upon SS's "retirement".

Interview/Article in East African Dec 4 2000

Suresh Shah retires/resigns as MD of Uchumi in 1999 after an extremely successful run from its loss-making days as a government owned institution (through shares owned by ICDC, ICDCIC & KWAL) to its IPO & subsequent success. It has a 14 year run of making profits under Shah. Rumours have it that he was forced to resign to enable "politically correct" individuals control the cash-rich (over KShs 500 Million) & cash-generating behemoth. These "pc" individuals entities would also then become suppliers to Uchumi.

Suresh Shah's interview with Nation on his pending "retirement".

USL issues a bonus of 1:2 i.e. 1 share for every 2 held. Price hits a high of 60/-.

Kenya enters into an inflationary period & Uchumi's cash hoard increases Uchumi's interest income substantially. Uchumi undertakes a careful expansion concentrating on Nairobi. The logic as explained by the MD was expansion undertaken with a view to "logistical distribution" i.e. Can enough goods be supplied to new stores from a central point at a reasonable cost. This was pre-barcodes & ERPs thus control of shrinkage was paramount in the retail business.

USL goes public through an IPO at 16.50 which was oversubscribed. Suresh Shah remains MD & price goes up to 20/-.

Suresh Shah becomes General Manager then Managing Director of Uchumi (1980 to 1999).

Uchumi Supermarkets is established in 1975.