Shoprite Holdings Limited, the parent company of Shoprite stores in Nigeria, says it has concluded plans to sell its Nigerian unit but is expecting approval from the Federal Competition and Consumer Protection Commission (FCCPC).
The company, in its half year 2020 financial report seen by BizWatch Nigeria, said the 100 per cent equity sale of its Nigerian subsidiary, Retail Supermarkets Nigeria Limited, would be concluded before the end of this year.
In the report, Shoprite classified its Nigeria subsidiary as discontinued operations as it had marked the business for sale.
The company had in August, announced that it would gradually end its operation in Nigeria, after getting board approval.
Shoprite said the board decided to formally exit its operations in Nigeria over unfavourable market conditions.
The latest financial report for a 26-week period ended December 27, 2020, stated, “The Group confirms that the terms of sale have been concluded for the disposal of a 100% equity stake in its Retail Supermarkets Nigeria Ltd subsidiary.
“The transaction has been lodged with the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) for approval.
“Management expects the transaction to be approved by the end of the 2021 financial year. Management is in the process of concluding a franchise agreement for the Shoprite brand to remain in Nigeria as well as an administration and services agreement to provide support to the new shareholders with operating the outlets.”
Shoprite’s Chief Executive Officer, Pieter Engelbrecht , was quoted as saying, “We closed the last of our Kenyan stores in February 2021 and are at the approval stage in terms of the sale of our Nigeria supermarket operation. From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can.”
“Assets and liabilities relating to the Nigeria operations disclosed as held for sale.”
For the 2020 operational year, the company still found the business profitable but still held onto discontinuing the operations.
“Statement of comprehensive income reflects profit from discontinued operations separately; assets and liabilities relating to the Nigeria operations disclosed as held for sale,” it stated.
The company said it would continue its operations in Angola, Zambia and Mozambique and reported an appearance exchange rate crisis in Nigeria between the US dollar and the Naira, causing a loss of -7.9 percent as of 2020 when considered to the exchange rate in 2019.
The company said it planned to ‘de-dollarise costs where possible’ while ‘increasing local procurement’ across its retail outlets.
Meanwhile, Shoprite workers in the country in past week had embarked on protest over the alleged refusal of the management to meet up with the demands of the union.
The workers, under the aegis of the National Union of Shop and Distributive Employees (NUSDE), had vowed that the company would remain shut until management acceded to their demands.
The Chairperson, NUSDE, Shoprite branch, Williams Peter, told journalists in Ibadan that the union was using the Easter period to press home its demands since dialogue had failed.
He stated that all Shoprite stores had been shut down nationwide because the negotiation between the union and the management had been deadlocked.
He said that although the planned transfer of Shoprite to a new owner had been withheld for now, the Easter period was the right time to get management to listen and accede to their demands.