Sale of KFC franchise back on track
Brian Benza | Friday July 7, 2017 17:07
KFC was placed under final liquidation by the High Court in September last year but the process to sell the franchise was stalled after VPB proprietor Anthony Siwawa lodged an appeal against the judgement.
KFC liquidator Nigel Dixon-Warren of KPMG told BusinessWeek on Wednesday that following the withdrawal of the appeal, they have now shortlisted nine companies from Botswana and outside.
“This week we will send out the information memorandum to the nine shortlisted companies for them to table their offers for the business. In four weeks’ time, we would expect to receive their bids from which negotiations will resume with the preferred bidder before we table the offer to the creditors at the end of September. We expect to have finalised the whole disposal process by the end of 2017,” he said.
The appeal was against High Court Judge, Michael Leburu’s judgement last September, which confirmed the final liquidation of KFC Botswana paving way for the entity to be sold to the highest bidder. Despite Siwawa putting up a fight to save the business from final liquidation, Leburu pronounced it just and equitable for the operation to be wound up considering that its franchise agreement has been terminated while it has also failed to service a P41 million FNBB loan amongst other creditors. FNBB, through chief executive officer Steven Bogatsu, had petitioned for the final liquidation of VPB Propco and three other related companies, which Siwawa was contesting.
The KFC Botswana business was run through four connected companies being VPB Propco, the franchise holder, QSR Food Company and Boitumelo Dijo, which between themselves held leases and trading licences for the 12 KFC outlets.
The fourth company, Greenax Limited, which was cited as the fourth respondent in the petition, only operated in–store point of sale machines and received cash from the 12 outlets.
Following an urgent petition by FNBB, KFC Botswana was placed under provisional liquidation on June 2, 2016 with the provisional liquidator Dixon-Warren later determining the franchise’s total creditors at P106 million.
Amongst some of the largest creditors is FNBB, which was the lead petitioner for the company to be placed under liquidation over a P41 million debt. Other banks such as Stanbic and Barclays are owed various amounts as well. Franchise holder, Yum Restaurants is reportedly owed about P21 million comprising franchise, advertising and trading fees.
Botswana Unified Revenue Service is allegedly owed about P4.9 million amongst other creditors. Siwawa also accused FNBB, Yum and a potential buyer, Callus of colluding to sell the business at a cut price of P60 million ‘instead of P151 million being a reasonable value for the KFC Franchise’. On Wednesday, Dixon-Warren said at the first creditors’ meeting, at least claims worth P80 million were presented with the figures expected to rise to about P100 million when all the claims are submitted.