Standard Chartered buys into Choppies

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STANDARD Chartered’s private equity arm has taken a 13% stake in Botswana-listed supermarket chain Choppies Enterprises, hardly three months after the retail giant opened shop in Zimbabwe.

Own Correspondent

Choppies Enterprises initially bought the entire stake in the Bulawayo-based Supermarket chain owned by local tycoon Raji Modi in October last year. Market watchers claimed it was probably one of the biggest deals in Matabeleland in recent years although the figures for the transaction remained under wraps.

Last month Modi bought back a 20% stake in Choppies Zimbabwe, which intends to establish about 100 retail outlets in the country. Presently the retail giant operates more than 10 shops in and around Bulawayo.

It emerged on Tuesday that Standard Chartered private equity had acquired a 13% in the Botswana entity, viewed as the latest private-equity deal to target African consumers.

Although the London-listed Standard Chartered did not disclose the acquisition price, Choppies is estimated to have a market value of $456m, according to Reuters data, which would make the stake worth nearly $60m.

The impact of the financial institution’s investment into Choppies Zimbabwe could not be ascertained yesterday, but a respected financial news agency noted that Africa is increasingly seen as fertile ground for private-equity firms, given rapid economic growth and rising consumer spending.

With the exception of Johannesburg and Nairobi, sub-Saharan Africa’s capital markets are largely illiquid.

This makes private equity one of the few vehicles for investing in African companies.

Choppies, the largest retailer in Botswana, operates more than 100 supermarkets and has operations in South Africa and Zimbabwe.