Nigeria: Shoprite's Shares Appreciate Amid Plans to Sell Nigerian Subsidiary

Admin 04-Aug-2020 Business

South Africa's Shoprite Holdings recorded an 11 per cent rise in its shares on Monday amid plans to sell a majority stake in its Nigerian subsidiary.

Although the company reported higher total sales, it also announced that it was considering the sale of all or a majority stake in its subsidiary in Nigeria.

PREMIUM TIMES reported that the company made the proposed sale announcement on Monday in its operational and voluntary trading update for the year ended on June 28, 2020.

The multi-national retail group, which announced a 6.4 per cent increase (R156.9billion) in total sales of merchandise for the outgoing year despite the challenges posed by the COVID-19 pandemic, announced that it took the decision to discontinue its Nigeria operation "following approaches from various potential investors, and in line with our re-evaluation of the group's operating model in Nigeria.

"The Board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited. As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time," the report stated.

In recent years, Africa's top supermarket has been reviewing its long-term options in Africa as currency devaluation, supply issues and low consumer spending have affected operations in some countries, including Nigeria.

In the 52 weeks up till June 28, it reported that its total sales rose 6.4 per cent to 156.9 billion rand, adding that its full-year headline earnings per share (HEPS) could rise despite the impact of coronavirus pandemic on sales and purchasing power of consumers.

Reports say the group plans to publish its 2020-year end results on September 8.

Shoprite opened its first store in Nigeria in December 2005 and now has a total of 26 stores across eight states in the country including Federal Capital Territory, Abuja. The company also claims to have employed more than 2,000 people in Nigeria, of which 99 per cent of them are Nigerians.

Shoprite also claimed to have built more relationships with over 300 Nigeria suppliers, small businesses, and farmers.

Read the original article on Premium Times.

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