SPAR de-merger gains traction

Tycoon Ray Kaukonde

Published: 21 October 2013

Conglomerate Innscor Africa Limited has begun formal talks for the acquisition of the Western Region SPAR franchise from tycoon, Ray Kaukonde, himself a major shareholder in the cash-rich retail and manufacturing concern.

The move comes hard on the heels of a restructuring of Innscor's grocery division, SPAR, which is expected to pave the way for a possible de-merger and separate listing on the domestic bourse.

Sources said as part of the deal, Kaukonde would increase his interest in Innscor.

It is expected that an annual general meeting of shareholders will discuss the proposals by Innscor.

A highly placed source said to get a listing, SPAR would need to have at least 24 retail outlets of its own. Most SPAR outlets are owned by individuals.

This means the group, which has only four SPAR retail outlets, would have to buy additional outlets.

Already, talks with Kaukonde include the purchase of his two retail outlets in Harare operating under the SPAR franchise.

Kaukonde owns two state-of-the-art SPAR supermarket outlets in Harare - Joina SPAR and Borrowdale Brooke SPAR - both of which fall under the Eastern Region Spar Distribution Centre. Kaukonde's other retail outlets include Marondera Wholesalers and Ronolf Wholesalers in Mutoko. All are held through Scotia Holdings, which has vast interests in automotive dealership and servicing, farming, security and steel.

SPAR finance director, Tineyi Mandengu, confirmed the talks were in progress but refused to give details.

"It's true, Innscor Africa Limited (wants to acquire) the Spar Western Region franchise from Kaukonde but for more details get in touch with our group corporate affairs executive, Musi (Musekiwa) Khumbula," said Mandengu last week.

Khumbula is the corporate affairs executive for Innscor. He could not be immediately contacted for comment.

SPAR has two regional franchise holders in Zimbabwe, with Innscor controlling the SPAR Eastern Region Distribution Centre (Eastern Guild) and Kaukonde controlling the Western Region.

The Eastern Region was formed in 2001, as a partnership between Innscor Africa Limited and SPAR South Africa.

Kaukonde took over control of the Western Region Spar Distribution Centre (Western Guild) in 2011 through his investment vehicle, Scotia Holdings, from ZSE-listed starafricacorporation limited, which held the Spar licence through Advance Wholesalers.

Advance Wholesalers held the Spar Zimbabwe license jointly with Spar Harare (Private) Limited, a unit controlled by Innscor Africa Limited, a fast moving consumer goods integrated chain with operations both in Zimbabwe and the region.
- fingaz