Mmegi Online :: Choppies shares offer 400% oversubscribed
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Last Updated
Tuesday 20 November 2018, 13:46 pm.
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Choppies shares offer 400% oversubscribed

After completing its initial public offer (IPO) that was oversubscribed by 400 percent, Choppies will list on the Botswana Stock Exchange (BSE) on Thursday this week.
By Staff Writer Tue 20 Nov 2018, 20:31 pm (GMT +2)
Mmegi Online :: Choppies shares offer 400% oversubscribed








In a statement, the company says it has received BSE approval to list 1.2 billion shares on the domestic main board after the public responded overwhelmingly to the shares offer.

After the final allocation, 25.5 percent of Choppies will be in the hands of public shareholders, both individual and corporate, while directors Farouk Essop Ismail and Ramachandran Ottappath shareholding  will  be whittled down to 34,2 percent from 46 percent.

Other pre-IPO minorities,  including former president Festus Mogae's 3.4 percent shareholding, will hold 5.6 percent in the listed Choppies while employees will hold 0.4 percent.

The company had reserved five million shares for its employees, but the lot was not fully taken up as Choppies staff applied for only 4.5 million shares.

"As at the closing date, the total number of shares applied for by members of the public were 156 million, which equates to 400 percent, or four times the number of shares available for allocation among members of the public," Choppies says in a statement.

As a result, the company says in order to achieve a full and healthy spread of shareholders and ina the interest of liquidity, they will allot in full applications of 10,000 shares or less, while application for any number greater than 10,000 will receive 10,000 shares plus 16.88 percent of the excess number above 10,000.

The retail group raised P350 million in both the IPO and the private placement. With 49 stores in

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Botswana and plans to open seven more by June this year, Choppies is the largest supermarket chain in the country, raking in over P103 million after tax in 2011.

The group says part of the P350 million will be used to spur Choppies regional expansion, particularly in South Africa where the company has nine stores. It intends to increase its footprint in the southern African region to over 30 stores within the next two years.

Choppies also has its eyes on the Mozambique and Zambia markets where the group believes there is still room for growth in the retail sector. Says the IPO prospectus: "The group intends to have 16 additional stores over the next two years with a vision to expand to 150 stores over the next five years."

Apart from raising cash for the expansion, Choppies says listing on the BSE will create a strategic reserve to allow the retail giant to take advantage of opportunities of acquisitions as and when they arise.

The IPO would also be used to raise capital to retire shareholder loans.

Meanwhile, revenue is forecast to grow by 40.5 percent during 2012 due to strong growth in South Africa and Botswana operations.

Choppies Botswana operations are expected to expand by 18.3 percent for financial year 2012, driven by the opening of eight more stores in the current financial year, which are expected to contribute 10 percent of such growth.

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