Choppies reveals loans worth Ksh.850 million in Kenyan banks
Botswana based retailer Choppies has revealed loans worth Ksh.850 million in local banks at the end of its operations in the country in October last year.
In its annual report published last week, the retailer revealed it had obtained a Ksh.300 million overdraft facility from the United Bank of Africa (UBA) Kenya.
The retailer further said it has a Ksh.300 million bank facility with Absa Kenya which it had tapped to finance expansion operations.
The retailer which is now defunct in Kenya however showed it was burning through cash fast to stay afloat in the country ahead of exit.
In July 2019, the retailer reveals it obtained a Ksh.250 million overdraft facility from I&M Kenya to finance working capital over a five-month period- a facility guaranteed by Shanta Retail Holding- a minority shareholder in the chain.
A month later, the retailer would tap an additional Ksh.430.8 million facility from the minority shareholder before opting out of the local scene in October.
Choppies now discloses it has disposed all of its Kenyan branches but one while employing the proceeds to clear its liabilities.
The supermarket has tabulated its dues in Kenya at Ksh.1.2 billion and expects to complete its exit imminently with the ease to travel restrictions.
The chain sighted difficult market conditions and a constrained cost structure of stores for its woes.
Its operations for the year ended June 2019 through Choppies Enterprises Kenya and Choppies Distribution Centre ended up in a trading loss of Ksh.889.1 million forcing management to pull the plug.
The retailer whose entry into Kenya was through the sale of defunct Ukwala in 2015 ended in a similar fate as it ceded the control of branches to its rivals among them Quickmart which has taken the majority of its branches in Nairobi’s Central Business District.
The Botswana holding company- Choppies Enterprises Limited wrote impaired the Kenyan investment at a cost of Ksh.1.7 billion (BWP 178.9 million)
The retailer has guaranteed part of liabilities in Kenya among them Ksh.77 million worth of goods from local suppliers among them Kapa Oil, Unga Limited, DelMonte Kenya and Haco Tiger Brands East Africa.
At its height of operations, Choppies Kenya had just over 15 branches spread out across the country in Nairobi, Nakuru, Kericho, Bungoma, Kisumu, Kisii and Athi River.