Botswana's Choppies inches closer to Ukwala takeover

An Ukwala Supermarkets store on Tom Mboya Street in Nairobi on October 29, 2013. Botswana-based Choppies Supermarkets on Tuesday inched closer to taking over operations at Ukwala Supermarkets by urging creditors to declare their debts and liabilities in writing. PHOTO | SALATON NJAU | NATION MEDIA GROUP 

In Summary

• Choppies, said its conditional agreement with Ukwala owners meant that it would take over all operations, as well as the brand name Ukwala.
• The deal will see Choppies take over all Ukwala operations — general trading, importing, exporting, distribution, supply, selling and dealing as retailers of all types of goods.
• Choppies enjoys dual listing, first done at the Botswana Stock Exchange and later at South Africa’s Johannesburg Securities Exchange.

By JAMES KARIUKI
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Botswana-based Choppies Supermarkets on Tuesday inched closer to taking over operations at Ukwala Supermarkets by urging creditors to declare their debts and liabilities in writing.

Choppies Limited, which offered Sh1 billion for an all-out buyout of all Ukwala stores, said it would not be held liable for any unpaid monies incurred by former owners of the supermarket.

This is in relation to the day-to-day operations of Ukwala's supermarket chain, with branches in Nairobi, Nakuru, Kisumu and Bungoma.

Choppies, which boasts of 125 stores in Botswana, South Africa and Zimbabwe said its conditional agreement with Ukwala owners meant that it would take over all operations, as well as the brand name Ukwala.

Details seen by the Nation showed that the two parties had agreed on the sale of Ukwala Supermarkets’ Mfangano, Tom Mboya and Haile Selassie branches in Nairobi, Bungoma branch as well as Dubai, Kenshop, Foamat and Swan branches in Kisumu.

The deal will see Choppies take over all operations — general trading, importing, exporting, distribution, supply, selling and dealing as retailers of all types of goods carried out by Ukwala Supermarkets.

Choppies Group Chief Executive Officer Ram Ottapathu confirmed the buyout, saying they had partnered with a Kenyan company, Shantal Retail Holdings Limited who have contributed 25 per cent equity and debt proportionately in the new vehicle, Choppies Enterprises Kenya Limited, which will oversee operations in Kenya and Tanzania.

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Shantal Retail are backed by the directors of Export Trading Group (ETG), the leading agricultural commodities trading and logistics business in Kenya.

Mr Ottapathu said the transaction was in line with the group’s strategy of expanding into new markets in sub-Saharan Africa, where they plan to have 200 stores in six countries by the end of next year.

Choppies’ said its move to acquire Ukwala and its entire branch network from Kenyan owners, Mr Parin Bharakumar Patel and Mr Birju Pradipkumar Patel, was in line with its strategy to fast-track its entry into Kenya, giving it a platform to grow its business in the country

The two companies also agreed that Ukwala would trade as Choppies Ukwala supermarkets.

The statement indicated that the purchase consideration represents less than five per cent of Choppies’ market capitalisation, currently estimated at Sh 84 billion.

Choppies enjoys dual listing, first done at the Botswana Stock Exchange and later at South Africa’s Johannesburg Securities Exchange.