Nigeria: Shoprite Insists On Sales, Discontinuing Nigerian Outlets

Shoprite Retail Outlet,

Shoprite Holdings Limited, the parent company of Shoprite stores in Nigeria and other African countries, has again classified the Nigeria subsidiary as discontinued operations as it marks it for sale.

The company had in August in its half year 2020 financial report, announced that it will gradually end its operation in Nigeria.

It said the board decided to formally exit its operations in Nigeria over unfavourable market conditions.

"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, RSNL may be classified as a discontinued operation when Shoprite reports its results for the year," the management said in the update.

Shoprite Holding in the latest publication of its financial report for December 2020 operations, under its non-current assets held for sale and discontinued operations, maintained that in the short-term, "Strategic shifts made with the Nigeria sale and Kenya closures.

"Classify the Group's Nigeria subsidiary as discontinued operations," it said in the report.

In the comparative result obtained from its website on Monday, Shoprite Holdings said the business was profitable but still marked for sale since 2019.

"Assets and liabilities relating to the Nigeria operations disclosed as held for sale."

For the 2020 operational year, the company still found the business profitable but still held onto discontinuing the operations.

"Statement of comprehensive income reflects profit from discontinued operations separately; assets and liabilities relating to the Nigeria operations disclosed as held for sale," it stated.

Sale near completion

Still providing the transaction update, the company said the "Nigeria sale near completion" just as the Kenya closure will be complete by year end and would be reported as discontinued operation in June 2021, a process towards winding up its outlets in Kenya.

The company will continue its operations in Angola, Zambia and Mozambique while discontinuing operation in Nigeria. It reported an appearance exchange rate crisis in Nigeria between the US dollar and the Naira, causing a loss of -7.9 percent as of 2020 when considered to the exchange rate in 2019.

The company hopes to 'de-dollarise costs where possible' while 'increasing local procurement' across its retail outlets.

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