Carrefour pays off Sh1.5bn loan before maturity

Carrefour Kenya has repaid a Sh1.53 billion loan it obtained from Dubai-based parent firm Majid Al Futtaim before contractual maturity, an indicator of the growing fortunes and financial muscle of its local subsidiary.

In 2016, Majid Al Futtaim extended a Sh1.5 billion loan to its Kenyan subsidiary to fund its expansion, money that was to be repaid during a two year period starting 2018.

Carrefour Kenya, however, has repaid all the dues, according to disclosures in Majid Al Futtaim’s 2019 half year results.

“In 2016, term loan facilities of Sh1,530 million (Sh1.5 billion) and GEL10.9 million (Sh382 million) were obtained by the Group’s subsidiaries in Kenya and Georgia respectively.

These facilities were paid and settled by the Group during the period prior to their contractual maturities,” the financial report released says.

Majid Al Futtaim, the exclusive holder of Carrefour’s franchise in Kenya, earlier this year announced it had registered a 71 percent jump in local sales from Sh8.11 billion in 2017 to hit Sh14 billion in 2018 in an indication that its footprint expansion is paying off.

Carrefour’s growth in Kenya comes amid its expansion bid that has seen it open seven stores in Nairobi.

The sales registered from Carrefour’s puts it in the multi-billion-shilling range as the brand emerges as a top alternative for customers in the wake of Nakumatt’s decline.

The retailer has been expanding its presence in Kenya by taking over spaces previously occupied by struggling supermarket chains including Nakumatt and Uchumi, as well as opening new spaces to cash in on underserved markets.

In the wake of its expansion bid, the firm has refurbished its stores at the Village Market, Junction Mall and Thika Road Mall (TRM), which has seen the three outlets previously operating as mini marts increase their products selection.

Existing branches are located at the Junction, Nyayo roundabout, The Hub in Karen, Village Market, Two Rivers Mall, Thika Road Mall (TRM) and at Sarit Centre in Westlands.

The spirited entry into Kenya by multinational chain stores has stiffened competition, pitting new players against the local family-owned retailers.