Choppies shares over -subscribed on JSE

Botswana’s leading grocery group, Choppies Enterprises has announced that its shares that were floated on the Johannesburg Stock Exchange (JSE) were strongly over-subscribed.

l Top three directors to pocket P642m

In a statement, the group indicated that it has successfully placed 277 420 758 hares at an offer price of R4.90 (P 4.02) per offer share.

“The bookbuild in relation to the offer closed on Wednesday May 20, 2015 and was strongly over-subscribed,” reads the statement.

The offer comprised a placing of 117 420 758 new subscription shares and 160 million existing shares.

 Under the deal, a total of R1.369 billion (P1.125 billion) was raised with R575 million (P471 million) to be used to reduce debt and finance expansion plans while the retailer’s top three director will collectively pocket R784 million (P642m million) from selling their shares.

Chief executive Ramachandran Ottapathu and deputy chairman Farouk Ismail are collectively selling 150 million shares and will each collect a R367.5 million (P301.3 million) pay cheque while chairman, Festus Mogae will be paid R49 million (P40.1 million) for the 10 million share he sold.

The offer price of R4.90 was determined by way of a bookbuild process managed by Rand Merchant Bank (RMB) of South Africa.

The settlement date in respect of the offer and the listing date are expected to be Wednesday 27 May 2015.  Based on a total of 1 291 628 341 ordinary shares outstanding at the listing date, the offer price implies a total market capitalisation of R6 329 million (P5 201 million).

At the end of last year, Choppies had total borrowings of P466 million, as shown by its interim financial results for the six months ended December 31, 2014.

The P4.7 billion company, which already trades on the Botswana Stock Exchange (BSE), plans to double its store numbers in existing markets, and enter new countries such as Zambia, Tanzania and Kenya.

Ottapathu said they are on track to have over 200 stores by the end of 2016.  “We will be opening our first stores in Zambia and Tanzania by mid-2015. This is on top of the three countries where we already operate, including South Africa,” he said.

Since listing on the BSE in 2012, Choppies has maintained a dividend payout ratio consistently above 30 percent. As the business matures, the dividend payout ratio is expected to increase towards 50 percent.

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