Botswana-based supermarket chain Choppies has restructured its outstanding loan estimated at $56 million, as part of tactical measures intended to breath life into a firm weighed down by deepening losses attributable to challenging business environment in East African region. FILE PHOTO | NATION MEDIA GROUP • Choppies had classified its operations in Tanzania, Kenya, Mozambique and South Africa as being distressed.
• In Kenya, the firm has scaled down operations to only two stores, but says negotiations are on-going to sell equipment to local operators and or existing landlords to clear some of the outstanding liabilities.
• Initially Choppies operated about 217 stores in Botswana, South Africa, Zimbabwe, Zambia, Kenya, Tanzania and Mozambique.
Choppies—the Botswana-based supermarket chain that about four years ago embarked on an aggressive expansion drive across Africa—has beat a hasty retreat to cut mounting losses in new markets.
The retail chain has, in a circular to shareholders, announced discontinuation of operations in several African countries, among them Kenya and Tanzania.
Choppies Enterprises Ltd (CEL), which is listed on the Botswana Stock Exchange (BSE) and cross-listed on the Johannesburg Stock Exchange (JSE), has also shut down its operations in Mozambique and placed its South African business on auction, with a plan to concentrate on growing its market share in its home country.
It has also restructured its outstanding loan estimated at $56 million, as part of tactical measures intended to breathe life into a firm weighed down by deepening losses attributable to stiff competition in the retail space.
Choppies had classified its operations in Tanzania, Kenya, Mozambique and South Africa as being distressed.
The firm has also recapitalised to the tune of pula 150 million ($12.76 million) and restructured its management with hopes of regaining its footing in the grocery and merchandise business.
The fresh capital comprises a pula 100 million ($8.51 million) loan from two founding shareholders and pula 50 million ($4.25 million) from trading operations.
The restructuring meant to save the sinking business was announced in a circular to shareholders dated March 19, 2020.The circular reveals that Choppies decided to close its Tanzanian operations in November 2019, and efforts are now being made to sell assets and clear outstanding liabilities.“In order to stabilise the business and enhance shareholders’ value, Choppies has exited all the loss-making markets,” the circular states.In Kenya, the firm has scaled down operations to only two stores, but says negotiations are on-going to sell equipment to local operators and or existing landlords […]