Investors wary as Choppies seals 74thebe exit from SA :: Mmegi Online

Choppies signalled the end of its 11-year presence in South Africa this week with a deal to sell its estimated 88 stores to Kind Investments for 74 thebe, a symbolic amount because the buyer has to take over the shops’ significant debts and commitments.

Kind Investments will take over the loss-making stores and has committed to investing an immediate ZAR100 million in the SA stores towards working capital and stock to take advantage of the Christmas-buying frenzy.

Under the deal, the buyer inherits claims against the SA stores and Choppies is released from guarantees it gave to creditors and suppliers for the SA stores. Choppies, however, has also committed to underwriting “negative equity value” in the deal up to R150 million and also covering a further R125 million in claims that the buyer could make for certain risks, which include a possible foreign exchange violation and certain “reportable irregularities”.

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