NAIROBI, KENYA, JAN 22 — Fashion retailer Nairobi Business Ventures (NBV) has announced plans to raise more capital through issuance of a convertible debt, as it seeks to boost its operations.
The Board of Directors at the Nairobi Securities Exchange-listed firm has authorized management, together with ABC Capital (the nominated advisor), to work on modalities of the offer.
The company which made public the intentions on Friday has however not revealed how much it intends to raise.
“The board approved the issuance of a convertible debt to raise additional capital for the company, by way of a convertible debt, in such a manner and from such person or persons and on such terms and conditions in all respects and at such a time as the board may deem fit, subject to the requisite approvals,” the firm said in a statement.
The decision, which has been communicated to the NSE, was made at a special board meeting held on January 18, 2018 at the company’s Nairobi offices.
The loss-making retailer last year blamed its poor performance on delay in securing additional funds to finance its working capital requirements.
It also faulted a weak consumer spending for its low revenues.
The company reported a net loss of Ksh14.9 million in the half year ended September, reversing net earnings of Sh1 million a year earlier. Sales collapsed to Ksh8 million from Sh34.6 million.
The loss was also blamed on increased administrative and operating expenses against the marginal sales.
NBV had earlier said new loans could be provided by its major shareholders.
The resolution opens up a shareholding window, where providers of the new capital could acquire shares in the company in the future, as they accrue interest in the interim period.
The leather shoes and leather accessories dealer operates six outlets in Nairobi – two in Nairobi’s Central Business District and one each at Village Market, T-Mall, Capital Centre and Ongata Rongai.
It trades under the K-Shoe brand targeting the upper middle class market.
The public listed company was incorporated and registered in Kenya in March 2012.
It started out as a distributor of shoes in Kenya through the brand name ‘Kwanza shoes’.
These shoes were imported from China and India and branded in Kenya.
The Company later in 2013 changed the brand name from ‘Kwanza to ‘KShoe’, coined from “Kenya Shoe” with the ultimate aim of creating a brand that is entirely Kenyan.