CA approves KFC sale
*SILENT on losing bidders’ concerns
The Competition Authority has approved with conditions, the sale of the KFC Botswana franchise, bringing to an end a two-year period of uncertainty about the future of the franchise in Botswana.
The KFC Botswana portfolio, which consists of 12 restaurants, was placed under liquidation in June 2016, after the company failed to service its debts and creditors led by FNBB filed for the company to be liquidated.
The CA approved the sale to Bradleymore’s Holdings, a joint venture between Vivo Energy Africa Holdings Limited and Baobab Khulisani South Africa, (through its wholly owned Botswana registered entity, Seynara (Pty) Ltd.
The sale of KFC Botswana is a result of the liquidation and disposal of assets previously owned by Anthony Siwawa in various companies namely, VPB Propco, QSR Food Company, Boitumelo Dijo and Greenax.
The joint venture between Vivo, who own the Shell oil brand and Baobab Khulisani, who are running 12 KFC stores in South Africa, could see a merged business model where Shell garages also house KFC fast food outlets.
In a statement released last week, the CA remarked: “The Authority determined through the analysis of the facts of the merger, that the proposed transaction is not likely to result in the prevention or substantial lessening of competition, or endanger the continuity of the services offered in the market for quick-service or fast food restaurants. Nonetheless, the Authority took cognizance of the commitment by the merging parties in their intention to continue sourcing from local supplies approved by YUM”.
CA looks set to hold the new owners of KFC to its commitment “to develop a robust supply chain that is aimed at ensuring that local suppliers are capacitated to enable them to meet the supply requirements set by YUM.”
The conditions on the approval emphasize the security of jobs as well as the building and maintaining of local supply. This is cemented with a requirement that there will be no retrenchments at KFC for the next three years and the movement of staff is to be monitored with. Again, Bradleymore’s shall ensure that local suppliers are assisted in penetrating or meeting YUM’s standards of accreditation with the aim of sourcing from these suppliers.
Bradleymore’s shall annually, for a period of three years from the implementation date, submit to the Competition Authority, a detailed report indicating: Any changes to its employment records in the country and the reasons thereof; A list of its existing and new locally based suppliers, including the type of inputs they supply.
Some of the losing bidders in the sale of the embattled KFC Botswana franchise appealed to the Competition Authority to consider their unhappiness with what they saw as lack of transparency in the process of selecting possible buyers for the franchise, a matter that the Competition Authority has remained silent about in its statement.
Group Managing Director of Sefalana Holdings, Chandra Chauhan, at the CA hearing to determine whether the sale would breach competition rules, two weeks back, revealed that his company was one of the top four companies that had been selected to make indicative offers. Chauhan said they felt hard done by the opaque manner of the processes leading to the sale. He said though the final offer amount was not a matter of public knowledge, through fellow industry players, he had got wind of it, also asserting that the Sefalana Group could have beaten the offer, had it been given the chance.