Choppies bigwigs to cash from JSE listing
Top shareholders of Choppies Enterprises Limited are expected to rake in millions of Pula when the company finally floats shares on the Johannesburg Stock Exchange (JSE) in just over a week, the Botswana Guardian has established.
Three of Choppies’ biggest single shareholders - Chairman Festus Mogae, his deputy Farouk Ismail and Chief Executive Ram Ottapathu - will sell part of their shares worth millions of Pula in an Offer (to sell) which has already been opened and will close on Wednesday next week. The three are the only publicly known shareholders who will be cashing in by taking part in the Offer. Choppies also has hundreds of retail shareholders.According to the company’s pre-listing statement, the Offer comprises an offer for subscription of the company of up to 117 420 758 new subscription shares and a concurrent offer sale of up to 160 000 000 existing sale shares. However, as things stand, Choppies bigwigs are likely to come out as the biggest winners when the Offer closes. This is easy to determine because they own over 50 percent of the company’s stated shares.
Before the commencement of the Offer this week, Ottapathu directly owned 326,95 million ordinary shares which in total represent 27,9 percent of total issued shares. At Botswana Stock Exchange, the company has 1,17 billion shares on issue. Ottapathu’s boss Botswana’s former president Mogae owns 29 million shares in the stalwart retailer. This represents 2,5 percent of issued shares. Deputy chairman and executive director Farouk Ismail owns 263 million shares in the regional retailer that has announced an aggressive push going forward.
Speaking to the Botswana Guardian on Wednesday afternoon, Ottapathu - who is currently in Johannesburg, South Africa - said Mogae would be selling 10 million shares in the Offer. The Offer will be made, subject to certain conditions, to selected institutional investors in Botswana and other jurisdictions.The Offer price will be determined by way of a bookbuild process managed by Rand Merchant Bank (RMB) of South Africa. The bank, which has a unit in Botswana, acts as a bookrunner for Choppies and selling shareholders. In the event that the bookrunner chooses to use the current share price of Choppies for selling shareholders, 75-year old Mogae will pocket a cool P41,2 million from his 10 million shares that he is putting up for sale. At the BSE, the Choppies share price was trading at 412 thebe by midday on Wednesday.
But what the Mo-Ibrahim leadership prize winner will get is far less than what his deputy, Ismail, will get when the Offer closes, that is if the current share price is used. Ismail will be P406, 3 million richer by Wednesday. Shrewd Ottapathu will come second with P382,1 million for the 98,6 million shares he is selling.
When Choppies lists on the JSE, Africa’s biggest stock exchange by value, it will be the second Botswana company to make a secondary listing there after Wilderness Safari. Ottapathu said the listing would give the company a platform to “continue our journey of growth and expansion.” Choppies’ public profile will rise in Africa’s second biggest economy by GDP. The retail giant has in the past borrowed money from Rand Mechant Bank’s unit in Botswana to, among other things, purchase a private jet. Proceeds raised from the secondary listing will be used to settle a part of the company’s existing debts and fund expansion.
