The retailer, which has in recent months faced a severe liquidity crisis, is meanwhile deploying the Sh700 million loan it received from the government last week to bolster its operations ahead of the critical Christmas shopping season.
Uchumi says it planned to restock its stores and engage with suppliers to maintain their support as it works on a long-term funding solution including selling assets and raising billions of shillings from a strategic investor.
The government has the option of converting the loan into shares or being repaid in cash after eight years. The new CEO will need robust and quick support of shareholders to accomplish what Dr Kipng’etich could not pull off.
Dr Kipng’etich leaves behind a smaller Uchumi that owes its existence to the government, a 14.7 per cent shareholder that has been the source of life support for several ailing firms including Kenya Airways and Mumias Sugar Company.
Uchumi’s net worth turned to a negative Sh2 billion in the year ended June 2016 and worsened to Sh3.3 billion in the subsequent year, the result of asset depletion, mounting liabilities and losses brought by sales declines.
The retailer’s net loss over the same period narrowed from Sh2.8 billion to Sh1.6 billion. Net sales, standing at Sh2.5 billion in the year ended June, are less than a fifth of the Sh14.4 billion recorded three years earlier.