Uchumi Supermarkets rights issue was oversubscribed by 83 per cent equivalent to Ksh1.6 billion against a target of Ksh896 million, the regional retailer said in a statement.

“We are overwhelmed by the level of confidence our shareholders have demonstrated over the period of the issue despite a false start. This is a seal of approval by the market in the company’s direction and as management we promise that the funds will be put into projects that will continue to create more value to our shareholders,” said Jonathan Ciano, Uchumi Supermarket chief executive.

He said buyers of the Uchumi rights were evenly spread, adding that “the retail investors played a key role.”

The rights issue saw Uchumi sell 99 million ordinary shares at a discounted price of Ksh9 each. The money raised through the cash call will be used to fund its expansion and refurbish the existing branches. The retailer has announced plans to open two branches in Kigali and another one in Musanze next year. The three outlets will have a combined staff of 400.

“We expect to refurbish eight branches that will cost us Ksh200 million,” Mr Ciano said. Faida Investment Bank was the Lead Transaction Advisor on the issue.

“Uchumi’s current market levels provide a compelling investment opportunity for both institutional and individual investors,” he added.

‘‘The participation of these investors in the rights issue and the level of oversubscription is a ringing endorsement of Uchumi’s future and of Kenya’s retail sector as a whole,” said David Mataen, Faida Investment Bank Director for Corporate Finance.