The International Finance Corporation (IFC) which is an association of investors that includes the PE fund Amethis Finance is set to buy a stake worth sh 1.5 billion from Naivas.
IFC disclosed that it is seeking to make an equity investment in conjunction with Amethis by buying part of Naivas shares. The Mukuha family, who own the majority of Naivas shares, will continue to lead the company as the main shareholder.
The stake to be owned by the co-investors is not yet clear. However, the capital is set to expand the business, which has attracted high competition from other companies such as Majid Al Futtaim-backed Carrefour franchise.
IFC is expected to strengthen the company’s governance structure, provide a food safety review program that is stricter than the local standards, and also assist in the improvement of the company’s social and environmental operations.
Naivas growth has projected months after the merge of Quickmart and Tumaini supermarket. The company has progressively expanded its local market in the last decade. It recently bought six stores worth sh 422 million from the collapsed Nakumatt.
A review of supermarkets/malls in the country has pointed out that money laundering, internal fraud, and mismanagement are the top problems affecting this type of business.
IFC is set to build on Naivas Corporate Governance Structure and align it to potential IPO at the Nairobi Securities Exchange.