Another bumper payday awaits Choppies directors
Brian Benza | Friday January 8, 2016 18:00
The Far Property Company, which is almost 100 percent owned by the two directors, is set to list on the BSE before the end of the first quarter this year.
Far Property owns about 173 properties in Botswana and South Africa, the majority of them being warehouses and shopping centres where Choppies operates from.
In the interview with Business Week, Choppies CEO Ramachandran Ottapathu declined to comment on the value of the company but said they hope to list the company in the next two months.
“We expect to list the company before end of February. Until the prospectus is out, we can’t disclose much details but the company owns warehouses and shopping centres in Botswana and South Africa,” he said.
While Ottapathu declined to reveal how much the company is worth, market observers place the valuation at between P1.2 billion and P1.4 billion.
In 2012, Standard Chartered Bank Botswana provided a P400 million structured flexible term facility to Far Property Company.
Selling of shares in Far Property could turn out to be another huge payout for the two after they raked in over a billion pula in financial dealings in 2015.
In September last year, Ottapathu and Ismail disposed of nine firms linked to the retail giant, for P450 million.
A consortium of investors led by the Standard Chartered Private Equity Mauritius, tied up a deal to buy Spark Capital, a company created to house the nine firms, most of which are suppliers to the Choppies Enterprises.
Apart from their majority shareholding in Choppies, Ottapathu and Ismail also jointly owned 94 percent of Spark Capital, with the remainder held by minority shareholders, mostly employees.
Other investors in the buying consortium for Spark were an American based company, Development Capital Africa Master Fund and Botswana registered Chalk Farm Investments, a company jointly owned by Collins Newman & Co. lawyers Rizwan Desai and Parks Tafa.
Under the terms of the deal, Stanchart PE, which bought a 12.8 percent stake in Choppies in 2013, in a deal estimated to be worth $60 million, bought 50 percent of Spark Capital, while Chalk Farm will purchase five percent. Companies housed under Spark Capital include Keriotic Investments, which distributes groceries to Choppies, ILO Industries grain (grain packaging), Honey Guide (milling company), Mediland Healthcare (Pharmaceticals distribution), Mont Catering (Air conditioning supplies), Real Plastics (bottled water) and Angarappa (building supplies).
The lucrative disposal of Spark Capital came just months after the two directors pocketed more than P600 million when they sold shares each on the Johannesburg Stock Exchange (JSE) in may last year.