Vusumuzi Dube
Judith Phiri, Business Reporter
LOCAL trading firm, Pin Tail Trading has expressed interest in buying listed leading supermarket retail chain, Choppies Enterprises Limited which recently announced that it is in talks to sell its Zimbabwe operations and exit the country.
Choppies, which has a primary listing on the Botswana Stock Exchange (BSE) and a secondary listing on the Johannesburg Stock Exchange (JSE), has a 100 percent stake in local company Nanavac Investments (Pvt) Limited, trading as Choppies Zimbabwe.
Choppies moved into Zimbabwe in 2013 via the acquisition of some Spar shops and in 2014 it opened a distribution centre in the country. Currently it has 30 stores in Zimbabwe.
The retailer, which has a long history in the Southern African region, announced in a statement on Friday that it has entered discussions regarding a possible sale of the business operations of Nanavac (Pty) Ltd trading as Choppies Zimbabwe for cash (Possible Sale).
Sources within industry revealed that one of the possible interests in the Choppies Zimbabwe shares has been expressed by Pin Tail Trading which runs the Sai Mart chain retail supermarkets brand, with six branches in Bulawayo.
Pin Tail is owned by Bulawayo businessman and Bulawayo South legislator, Raj Modi, who is also the Deputy Minister of Industry and Commerce.
In an interview with Sunday News Business yesterday, Deputy Minister Modi confirmed that Pin Tail Trading has expressed an interest in the Possible Sale but nothing has been done as yet.
“Yes, we are interested in the Possible Sale but nothing has been done as yet,” said the Deputy Minister.
According to the notice by Choppies, they noted that the Listings Requirements of the Botswana Stock Exchange (BSE) require the company to announce any circumstances or events that have or are likely to have a material effect on market activity, the price, value or trading of the company’s securities.
“The board of directors of Choppies (Board) hereby advises all shareholders that the Company has entered into discussions regarding a possible sale of the business operations of Nanavac (Pty) Ltd trading as Choppies Zimbabwe for cash (Possible Sale), which, if successfully concluded, could have an impact on the Company’s share price. Choppies Zimbabwe is wholly owned by the Company and is a grocery retailer with 30 stores in Zimbabwe.”
It said the Possible Sale, which is subject to certain conditions and regulatory approval, is aligned to the strategic intent of Choppies to focus on profitable retail.
In Zimbabwe, over the last two years, Choppies said there has been a significant shift to the informal retail sector, leaving the formal retail sector to battle a reduction of up to 30 percent in footfall and having to compete with the informal sector.
“While we believe in the country’s long-term viability, Choppies as a group needs more capital to support its Zimbabwean operations for extended periods and has already invested significant capital to support the operations. Due to the factors mentioned above we have decided to exit the country,” read part of the statement.
Choppies cautioned shareholders that there was no certainty at this stage that the discussions will lead to a formal transaction, and approval from the Zimbabwean Competition and Tariff Commission is required.
It said accordingly, shareholders are advised to exercise caution when trading in their Choppies shares until a further announcement is made.
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