Botswana's Choppies to raise $48 mln in South African listing

May 11, 2015 7:55 AM

JOHANNESBURG (Reuters) - Botswana grocer Choppies plans to raise $48 million in a secondary listing on the Johannesburg bourse, it said on Monday, seeking to boost its profile among investors in Africa's largest and most liquid stock market.

A worker walks past an electronic board displaying movements in major indices, at the Johannesburg Stock Exchange in Sandton, February 12, 2015. REUTERS/Siphiwe Sibeko

Choppies, which runs 125 stores in its home market, South Africa and Zimbabwe, will list the shares on May 27.

Under the offering to selected institutional investors in South Africa and Botswana, Choppies will sell 117.4 million new shares along with 160 million from existing shareholders.

The offer price for each share will be determined in a bookbuild process run by FirstRand's investment bank unit Rand Merchant Bank, it said.

"The listing will allow us to fast-track the continued roll-out of new stores, unlock opportunities in new markets and fund acquisitions," CEO Ramachandran Ottapathu said.

The $482 million company, which already trades on the Botswana Stock Exchange, plans to nearly double its store numbers in existing markets and enter new countries such as Zambia, Tanzania and Kenya.

Ottapathu said the company's seven distribution warehouses in the region could support 250 stores in South Africa, Botswana and Zimbabwe.

"We are on track to have over 200 stores by the end of next year and we will be opening our first stores in Zambia and Tanzania by mid-2015," he said.

Further expansion into the rest of Africa, where sales growth is about three times the rate in matured, saturated South Africa, would pit the Gaborone-based company against dominant South African retailers such as Shoprite and Spar Group.

Choppies, which had a total debt of 590 million Botswana pula ($60.2 million) at end of last year, said some of the money would be also used to pay down debt.

The company's sales totalled 5 billion pula last year, while its earnings before interest, tax, depreciation and amortisation, or core profit, was 352 million pula.

($1 = 11.9271 rand)

($1 = 9.8039 pulas)