Pick n Pay will exit Nigeria, selling its 51% stake in a joint venture, as part of a restructuring strategy. The retailer operates two stores in Nigeria and aims to raise capital through an IPO for its Boxer chain, with expected proceeds of R6 billion to R8 billion. This is intended to address debt and enhance the valuation of Boxer.
Pick n Pay, a prominent South African grocery retailer, has announced its decision to divest from Nigeria by selling its 51% stake in a joint venture. This strategic move formed part of the company’s broader restructuring efforts beyond its domestic market, as articulated by CEO Sean Summers. The retailer, which established its presence in Nigeria just under five years ago through a partnership with A.G. Leventis (Nigeria), currently operates two stores in the country. In parallel, Pick n Pay is preparing to list its discount grocery chain, Boxer, on the Johannesburg Stock Exchange via an initial public offering (IPO). The company has indicated that the base size of the IPO is anticipated to be at the upper end of its previous guidance, with expected proceeds ranging from R6 billion to R8 billion (approximately $339 million to $452 million). Additionally, the IPO will feature an overallotment option, which may allow the underwriter to sell more shares than originally planned should demand exceed expectations—an arrangement intended to stabilize pricing. This IPO forms a crucial part of Pick n Pay’s two-step recapitalisation strategy designed to alleviate its debt burden and revitalize its core loss-making supermarket operations. Moreover, the group aims to ensure that Boxer’s market valuation accurately reflects its superior growth prospects and return on invested capital.
This announcement follows the growing challenges faced by Pick n Pay in the Nigerian market, as the retailer evaluates its strategic positions outside its home country. The exit from Nigeria is a significant adjustment for Pick n Pay, which has been actively working on restructuring initiatives to enhance its financial health. The upcoming Boxer IPO represents a critical component of this strategy, aiming not only to raise capital but also to reposition the brand within the market to secure better financial performance.
In summary, Pick n Pay’s decision to exit Nigeria signifies a strategic restructuring aimed at consolidating its operations and enhancing financial resilience. With plans to launch the Boxer IPO, the retailer seeks to bolster its liquidity and address its financial challenges, demonstrating a proactive approach to market dynamics and shareholder value enhancement.
Original Source: www.sabcnews.com
