Choppies flexes muscles

Koobonye Ramokopelwa - BG reporter
Monday, 11 May 2015
Choppies flexes muscles

Botswana leading grocery group- Choppies Enterprise Limited- this week disclosed it will expand its footprints to two African countries mid this year. The latest information is contained in the company’s filing to the Botswana Stock Exchange (BSE).

It also announced that it intends to float shares at Africa’s biggest bourse-Johannesburg Stock Exchange (JSE). As punters prepare for a possible secondary listing at JSE, the group is also planning to open new stores in Tanzania and Zambia in the coming month or so. In a brief interview on Wednesday afternoon, the company’s Chief Executive Ram Ottapathu said they are at advanced stages of setting up outlets in the two countries. Is the expansion brownfield or greenfield? “We are starting from scratch,” he said from South Africa where he is attending to JSE secondary listing ‘issues’.

As if that is not enough, the group, which counts former President Festus Mogae among its directors, also announced eyeing Kenya and Namibia. BG Business had not established the total costs of the expansion at press time. Choppies is entering Zambia at a time when the economy is recovering, with more international investors buying the country’s old copper mines for resuscitation. Tanzania is East Africa’s biggest economy after Kenya. Choppies currently has 125 stores spread across Botswana, Zimbabwe and South Africa. This week, Ottapathu was excited that the time has finally arrived for the company shareholders to punch the air. “We are very proud of the company we have built from such humble beginnings into the largest and most profitable retailer in Africa outside South Africa,” he said.

Ottapathu is bullish going forward on their African push. He said his company is planning to expand its footprints to 200 by next year. The secondary listing coouldn’t have come at a better time. The listing, if approved by JSE will propel the company into greater heights. If the company gets the nod to list on the JSE, it will trade side by side with its regional and continental rivals such as Shoprite and Spar. Ottaptathu said the listing would give the company platform to ‘continue our journey of growth and expansion.’ Its public profile will rise in Africa’s second biggest economy by Gross Domestic Product (GDP).

The proposed JSE listing will entail issuing of new shares. An offer for sale made by existing shareholders at a price determined by a bookbuild process (‘the Offer’) will also be made. The offer price will be subjected to the terms that were approved by shareholders at last month’s extraordinary meeting held at Lansmore Hotel. Choppies has lined Rand Merchant Bank (RMB) as its bookrunner and sponsor for the Offer and listing. RMB/Choppies relationship is not new. The retailer has in the past borrowed money from the bank’s unit in Botswana to among others purchase a private jet.

Proceeds raised from the secondary listing will be used to settle part of the company’s existing debts and fund expansion. A pre-listing statement, including full details of the company and the Offer will be announced in due course. The Offer is not open to the public. Choppies, is the first retail group to expand outside the country listed on the BSE in 2012 at a price of 1, 15 thebe. As of May 4, 2015, the company’s share price stood at 4, 05 thebe.

Last modified on Thursday, 14 May 2015 16:50

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