Proparco, IBL Group acquire Ksh.3.7 billion stake in Naivas Supermarket
Naivas Supermarket has sold extra shares worth Ksh.3.7 billion to three new foreign investors in its new expansion strategy.
The new investors, Proparco, Mauritian conglomerate IBL Group and German sovereign wealth fund DEG will become among the retailer’s biggest shareholders.
Currently, Naivas is Kenya’s biggest supermarket by market share, stepping into the foot of defunct Nakumatt.
The three are taking up the 30% stake owned by investors including World Bank’s International Finance Corporation (IFC), MCB Equity Fund, Amethis, and German sovereign wealth fund DEG, which acquired the shares in April 2020 with an additional 10%.
“This is an exciting partnership by our shareholders that will drive us to the next phase of growth. We appreciate the immense knowledge and capacity in the retail industry that IBL brings to the table,” said David Kimani, Naivas’ Managing Director.
Naivas owners are ceding an additional 10% stake to the investors, an 11 percent stake shy of the 51 percent the foreign investors need to take a controlling stake in the giant retailer.
The entry of the IFC consortium valued Naivas at Ksh.20 billion in 2020 but the retailer’s worth has seemingly rocketed following its vast growth in two years to date.
The retailer is set to close the financial year ending this month with a gross turnover of Ksh.101 billion and expects to raise Ksh.117 billion in the next financial year.
In December last year, the High Court in Nairobi blocked further stake sales in Naivas Supermarket, following a fierce supremacy battle among siblings over the control of the retailer.
The battle followed the sale of a 30 percent stake to a consortium of investors for Ksh.6 billion.
The rivalry had pit Newton Kagiri Mukuha, the eldest son of Naivas founder the late Peter Mukuha Kago, and his brother David Kimani.
Kagiri had moved to court seeking to oust Kimani as the CEO. He is also seeking a seat in the Board, a 20 percent stake and a share of the 20 percent stake held by his late father. The 20 percent stake is estimated to be worth Ksh.4 billion.
In 2014, the High Court ruled that he had no stake in Naivas after it was found that he ran down all the stores he inherited from his father.
Naivas received Ksh.6 billion from the International Finance Corporation (IFC), private equity firms Amethis and MCB Equity Fund and German sovereign wealth fund DEG recently, meant for an expansion drive.
Currently, Quickmart with just 51 branches, trails Naivas as Kenya’s biggest retailer.
Naivas opened a third in Naivasha, its pioneer location, bringing the total number of branches in the country to 84.