Zim­babwe’s Chop­pies own­ers want 100% con­trol

CityPress - - Business - SIZWE SAMA YENDE busi­ness@city­press.co.za

Zim­bab­wean ma­jor­ity share­hold­ers of the strife­torn food re­tailer Chop­pies En­ter­prises Lim­ited have given no­tice to their Botswana part­ners to buy them out of the busi­ness.

Nanavac In­vest­ments (Pty) Ltd owns 51% of 32 Chop­pies out­lets in Zim­babwe.

Nanavac’s own­ers are for­mer sec­ond vi­cepres­i­dent Phelekezela Mphoko and his son, Siqoko­qela, while the Chop­pies board chair­per­son is for­mer Botswana pres­i­dent Fes­tus Mo­gae.

Chop­pies has seen its share price dras­ti­cally drop­ping and Reuters this week re­ported that the Botswana Stock Ex­change – and the JSE, where the com­pany has a sec­ondary list­ing – sus­pended trade in Chop­pies shares af­ter the com­pany failed to pub­lish its au­dited fi­nan­cial re­sults for the year ended June 30 this year.

Chop­pies failed to re­lease its an­nual re­sults within three months of its fi­nan­cial year-end, break­ing the stock ex­change rules.

The fight among the share­hold­ers in Zim­babwe has been get­ting uglier.

Nanavac has ac­cused its Botswana part­ners of try­ing to “cap­ture” it and re­duc­ing its ma­jor­ity share­hold­ing, which aligns with Zim­babwe’s in­di­geni­sa­tion law, to a mere 7%.

City Press has seen the no­tice that Nanavac’s lawyers, from Mathonsi Ncube Law Cham­bers, gave to Chop­pies to in­voke clause 13 of the share­hold­ers’ agree­ment that the par­ties signed.

The buy­out clause, ac­cord­ing to the lawyers, reads: “Not­with­stand­ing any­thing con­tained in clause 10, the Mphokos may at any­time pur­chase all of the Chop­pies shares for a cash con­sid­er­a­tion equal to the lat­est au­dited [earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion] Ebitda mul­ti­plied by 12, and set­tled within 10 days of mak­ing such an of­fer…”

“In terms of the above quoted clause 13 of the share­hold­ers’ agree­ment,” the lawyers said, “we are in­structed to give no­tice, as we hereby do, that ours have de­cided to in­voke the pro­vi­sions of the said clause 13 of the share­hold­ers’ agree­ment and thus you are hereby given due no­tice that ours in­tend to buy out your­selves from the com­pany.

“This no­tice ef­fec­tively ter­mi­nates forth­with the busi­ness part­ner­ship be­tween our clients and Chop­pies En­ter­prises Lim­ited.

“Con­se­quently, in terms of clause 14 of the share­hold­ers’ agree­ment ours will, with as­sis­tance of ac­coun­tants and lawyers, be in­spect­ing the com­pany books of ac­counts to as­cer­tain the lat­est Ebitda for the pur­pose of de­ter­min­ing that which is payable to your­selves in terms of clause 13 of the share­hold­ers’ agree­ment,” the lawyers added.

Chop­pies spokesper­son Ja­cob Sesinyi did not re­spond to writ­ten ques­tions on the mat­ter.

In Septem­ber, Chop­pies ac­cused Siqoko­qela of tak­ing money, goods and ser­vices not due to him, es­ti­mated in ex­cess of $51 000 (R731 169).

Siqoko­qela said Chop­pies had frozen his salary over the past two months.

“They want me to get out of the com­pany and they want to pay me only 7%. They know very well that if I miss three months of my mort­gage pay­ment to my bank it will come af­ter my prop­erty. “They’ve told the trans­porta­tion divi­sion not give me any fuel at all with­out any board de­ci­sion.

“They’ve moved com­pany doc­u­ments from KPMG and tried to re­move me as sec­re­tary. I’ve never in my life ex­pe­ri­enced such fraud,” Siqoko­qela said.

Chop­pies op­er­ates in Botswana, South Africa, Zim­babwe, Zam­bia, Kenya, Tan­za­nia and Mozam­bique.

In South Africa it com­petes with su­per­mar­kets such as Boxer Su­per­stores and Shoprite, and its stores are mostly sit­u­ated in North West.

Chop­pies’ tar­get is to in­vest $22.2 mil­lion in an ex­pan­sion drive to in­crease its 217 stores to 250.

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