Saturday, July 2, 2022

Stanchart keeps value of Choppies’ deal under wraps

The financial details of a deal between one of the major shareholders of Choppies Limited and a private equity arm of the global banker, Standard Chartered Bank, have not been made public.

This is according to the bank’s head of private equity for Africa, Peter Baird in an interview with Sunday Standard this week.

Although he could give the value of the money that changed hands as a result of this transaction, Baird said that the investment was not made into Choppies as a company, but was a purchase of shares from an existing shareholder.

“The financial details of the transaction have not been made public. To be clear, however, the investment was made by Standard Chartered Private Equity (funded from the bank’s balance sheet), but not by Standard Chartered bank itself,” Baird told Sunday Standard on Thursday.

“Also, the investment was not made into Choppies, but was a purchase of shares from an existing shareholder.”

In a widely publicised deal that is believed to have been concluded late last year, Standard Chartered Private Equity, the investing arm of Standard Chartered Bank, acquired 13 percent of the local retailer, Choppies Enterprises Limited.

When announcing the deal some two weeks back, both parties decided not to discuss the financial details of the transaction which is estimated to be the largest private equity investment in the history of the local market.

However, Sunday Standard’s look into the Thomson Reuters investments data this week indicated that Choppies, which has its primary listing at the Botswana Stock Exchange (BSE), has a market value of P4003.51 (US$456 million).

This would make the newly acquired 13 percent stake of Standard Chartered worthy nearly P52 million (US$6 million).

Last week the Choppies Chief Executive Officer, Ramachandran Ottapathu, also confirmed the off market transaction which was legally guided by Collins Newman Law firm.

Ottapathu said that the transaction which happened on 18 December 2013 saw the transfer of the concerned shares to Standard Chartered Private Equity of Mauritius.

Choppies is one of the markets leading mass grocery retailers in the country specialising in fast moving consumer goods, household goods, fruit and vegetables, meat products, dry, fresh and baked goods through its stores in both Botswana, South Africa and soon in other African countries.

Currently the group operates 73 retail outlets in Southern Africa, comprising of fifty 56 stores in Botswana, and 17 stores in South Africa. With the proposed acquisition in Zimbabwe, the number could rise to 83, should the two parties agree to rebrand the soon to be acquired 10 supermarkets in Zimbabwe. The company executives also has its eyes set on the Mozambique, Zambia and Tanzania where the group believes there is still room for growth in the retail sector.

Baird says that Standard Chartered will continue to provide a range of financial services to Choppies as the company expands.

“Standard Chartered Bank is Choppies’ primary bank. The fact that SCPE is a minority investor should only strengthen the client relationship of the Company with the rest of the bank,” Baird said.

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