Ketron Investment Limited, a wholly owned subsidiary of the Nigerian property group Persianas Limited, has announced the buyout of Shoprite’s operations in Nigeria.
Persianas Limited is owned by Nigerian businessman Tayo Amusan. He is the chairman of Ketron Investment.
Persianas Limited acquired the African retail giant’s Nigerian subsidiary after receiving the greenlight from Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC), The Cable reported.
This follows a Reuters report in April that Shoprite Holdings Ltd. is awaiting regulatory approval from the FCCPC to sell its Nigerian supermarket operations to new investors.
“We look forward to building an even stronger company following our acquisition and are excited about the greater impact we will achieve to the benefit of our customers and other stakeholders now and well into the future,” he said.
Shoprite Holdings has been reviewing strategic divestment options in countries where it has an operational footprint, including Nigeria and Kenya.
The decision was triggered by currency devaluations, lower commodity prices and high inflation, which have hit household incomes and weighed on its earnings.
As a result, Shoprite restricted capital allocations to its subsidiaries outside South Africa, while making strategic investments in its core country of operations. By doing so, the company hoped to take advantage of its dominance in its key market segments, including grocery and the growing food and beverage segment.
Following this move, the retail giant revealed plans to exit the Nigerian market retail market after a string of losses in Nigeria.
Shoprite Nigeria’s total assets as of June 2020 were $125 million (R1.701 billion), while its total liabilities amounted to $140 million (R1.911 billion).
The cumulative foreign currency losses recognized in Shoprite’s discontinued operations in Nigeria were $35.9 million (R488 million).
The subsidiary lost about $6.4 million (R87 million rand) in 2020.