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  • Business - Companies
  • Updated: 1 year ago

Loopholes In Chastex Consult Claim As It Contradict Shoprite Holdings

Loopholes In Chastex Consult Claim As It Contradict Shoprite

PR firm, Chastex Consult's Country Director, Ini Archibong, has reacted to AllNews report that Shoprite will be shutting down its operation in Nigeria. Archibong denied the report stating that Shoprite has no intention, but his statement contradicts the official report from Shoprite Group.

Archibong said Shoprite is only allowing Nigerian investors into the South African retail company, and not packing up from Nigeria. According to him, the superstore giant won't shutdown its $30 billion investment as it makes no sense, "Shoprite is not leaving Nigeria.

"We have only just opened to Nigerian investors which we have also been talking to just before now. We are not leaving, who leaves over a $30billion invest and close shop? It doesn't sound right. We only just given this opportunity to Nigeria investors to come in and also help drive our expansion plan in Nigeria. So we are not leaving.

[READ ALSO: Two Methods Shoprite Will Use To Leave Nigeria As It Seeks To Reduce Risk Exposure]

"I have tried to say this as too many people as I can. There should be no panic at all and all of that. There is no truth in that report." Archibong told Vanguard in a report. However, his statement further shows a communication gap between Shoprite Holdings and its consultancy agency in Nigeria.

Disconnection Between Chastex Consult And Shoprite

While Archibong denied closure of Shoprite in Nigeria, the South African company had released an operational and voluntary trading update on the Johannesburg Stock Exchange (JSE), informing its investors that it will discontinue its Nigerian operation at the end of this year.

Shoprite Holdings stated in the trade filing seen by AllNews that, "Following approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria, the Board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited.

"As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time." Shoprite said.

What Shoprite Statement Means

This proves that the company is preparing to exit the Nigerian market after it sells its Nigerian assets to a new investor. When companies announce discontinued operation for their core business or service in an area, it's either the company is divesting its stakes to a new owner or shutting down operation.

[READ ALSO: Chams Plc Revenue Nosedive, Save Profit By Cutting Cost]

This relates to that of billionaire, Femi Otedola, who divested his stake in Forte Oil - this led to the change of name from Forte Oil to Ardova Plc. Same goes for Etisalat, when the UAE investors divested, and the network provider's name changed to 9mobile, with new owners taking over.

This means when a new owner takeover Shoprite, the name is likely to change, as Shoprite is selling its subsidiary, "Retail Supermarkets Nigeria Limited (which is in charge of Shoprite brand in Nigeria)" not its brand name, "Shoprite", which is owned by Shoprite Holdings in South Africa.

Also, while Archibong said the announcement was Shoprite's method of accommodating Nigerian investors, the official statement didn't narrow down the background of the investors, meaning Shoprite's subsidiary could still be acquired by a foreign investor or Nigerian investor.

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