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Shoprite shares dive on expansion plans

Mar 22 2012 11:08 Reuters

Company Data

SHOPRITE HOLDINGS LIMITED [JSE:SHP]

Last traded 157
Change 1
% Change 1
Cumulative volume 213371
Market cap 0

Last Updated: 27-03-2015 at 11:22. Prices are delayed by 15 minutes. Source: McGregor BFA

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 149
Change 1
% Change 1
Cumulative volume 35324
Market cap 0

Last Updated: 27-03-2015 at 11:20. Prices are delayed by 15 minutes. Source: McGregor BFA

FIRSTRAND LIMITED [JSE:FSR]

Last traded 54
Change 0
% Change 0
Cumulative volume 1086074
Market cap 0

Last Updated: 27-03-2015 at 11:22. Prices are delayed by 15 minutes. Source: McGregor BFA

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Shoprite boosts first-half profit

SA firms improve position

Shoprite boasts rise in half-year turnover

Massmart ups profit on forex

 
Johannesburg - Shares of Shoprite Holdings [JSE:SHP] tumbled 6.7% to R128.42, putting the supermarket chain on track for its biggest one-day decline since 2006, after it said it will raise up to $1bn by issuing new shares and convertible bonds.

The proceeds from the fundraising will be used to shore up its balance sheet and for potential acquisitions, Shoprite said on Thursday.

Shoprite, which has been ramping up operations in African countries beyond its home market, said in a statement it plans to issue up to 27.2 million new shares, equal to about 5% of its current shares.

The grocer said it would also issue R4.5bn of convertible bonds, bringing its total fundraising to R8bn.

The shares and bonds will be offered to certain institutional investors and not open to the public, Shoprite said.

Shoprite, which reported a 19% rise in first-half earnings last month, runs about 950 supermarkets, with 729 of those in South Africa.

It has announced plans to open 12 more stores outside South Africa by the end of June, including in the Nigerian cities of Illorin and Abuja. It also plans to enter the Democratic Republic of Congo.

Shoprite is likely to face tough competition in Africa following Walmart’s entry into the continent, after the US giant’s 51% purchase of discounter Massmart Holdings [JSE:MSM].

Goldman Sachs Group, Morgan Stanley and FirstRand [JSE:FSR] unit Rand Merchant Bank are acting as joint bookrunners.

Shoprite shares tumbled more than 7% in early trade on Thursday on the news of the fundraising.

Shoprite was down 7.4% at R127.50 at 07:04 GMT.

The company said it would use the funds to shore up its balance sheet and for possible acquisitions. 

 
 
 

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Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 

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