Four Pick n’ Pay outlets placed under total Swazi ownership

The four Pick n’ Pay stores recently bought by African Alliance (AA) and Greystone Partners have been put under total Swazi ownership.

Manqoba Makhubu | Swazi Observer

These were the franchise outlets which were formerly owned by the Fosters and these are the Mbabane Mall outlet, two in Matsapha; at Mahhala and Mashayitafula and the Manzini Hub outlet. The stores were acquired in December 1, 2016.  AA Private Equity Executive Peace Mabuza said Swazis who will be buying in these shops should rest assured that they are placing money in the hands of other Swazis.  Mabuza was speaking during the formal announcement of Greystone Partners Limited and African Alliance (AA) acquisition of the four Pick n’ Pay stores. African Alliance (AA) partnered with Greystone Partners, a private equity firm owned by the local pension funds. “If you go down the institutional ownership, there is a whole lot of beneficiaries, people who are retired and by extension they own the stores,” he said.   Mabuza said these two partners then created a holding company called Lojaf (Pty) Limited, which was specifically incorporated to execute the acquisition of the stores. For now, African Alliance holds 65 per cent stake and Greystone holds 35 per cent in Lojaf.  “The main vision of Lojaf is to offer the best service in this retail space to the Swazi client, put our customer first, put our people first and welcome the customers in for a nice shopping ambience in our business space,” he said. Mabuza said they have created a very good working relationship with the Pick n Pay franchise in order for them to execute their vision to be the best retail store in Swaziland. He said the reason they went for the stores acquisition was that they found it to be an attractive business. “They are ideally located in the major commercial hubs. When we talk about Mbabane, Matsapha and Manzini, you find that the stores are located in busy retail areas. In addition to that, we find that the Pick n Pay stores are perfoming exceptionally well and they are generating very stable cash flow.  Downturn Also, if you look at the retail sector, it is quite a defensive sector, even if there is an economic downturn, people still need to eat, they need to buy groceries and they will still need to buy food. So we feel that even if the economy is not perfoming well, the retail sector will forever be there, it’s a stubborn sort of asset and we believe it will not only sustain the balance sheet of Greystone Partners, but African Alliance as an extension,” he said. He said they also observed that the country continues to transition from an informal to a formal retail space. “As we see the development, as we move towards 2022, we feel that the Pick n Pay is part of the transition from a sort of traditional rural society to an upmarket middle income earning sort of populace,” said Mabuza. As evidence, in the past four years the retail sector growth has outpaced the country’s gross domestic product (GDP). Proud AA Chief Executive Officer Nelsiwe Mabuza said they were very proud of the Pick n’ Pay acquisition mainly because it re-emphasises their passion for the economy of the country. “We seek to no longer just be investment bankers, we also want to now participate in driving change in the economy. So we are continuously looking for opportunities in different sectors where we can make a difference, touch people and ultimately, hopefully in time bring some of these businesses to be owned by Swazis,” she said. AA General Manager of Asset Management Victor Langa said as asset management they were very proud of the acquisition of Pick ‘n Pay by African Alliance and Greystone Partners, most important our affiliation with Greystone. “We  are all aware of the change in Pension Fund Legislation, that is the 50 per cent local investments, its initiatives like these that will make our business succeed and remain relevant to the community we serve.  “We look forward to the opportunities that this investment brings to the kingdom and we believe that it will translate into good value for the shareholders as well as improving performance of our funds that directly invest into Greystone partners,” he said. He said they would continue to pioneer innovation and look into more alternative investments.  “These sorts of opportunities positions AA as a preferred service provider in meeting the 50 per cent local asset allocation requirement,” said Langa.