Sonae justifies closure of supermarkets in Maputo with decision of majority shareholders

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Sonae justifies closure of supermarkets in Maputo with decision of majority shareholders

1:37 CAT | 03 Oct 2018

Photo: O País

The Portuguese retailer says that the closure of the three supermarkets in Maputo, Mozambique, was due to an “irreversible” decision of the majority shareholder.

The Portuguese group Sonae, which holds a minority stake in Mozambican society S2, justified the closure of the three ‘Central’ supermarkets in Maputo with the “impossibility of reversing the decision” of the majority shareholder, while promising that it intended to maintain its presence in the local market.

“The insolvency proceedings result from the impossibility of reversing the majority shareholder’s decision to stop financing the company’s business plan, although we have always expressed our willingness to continue to finance our share,” an official Sonae source told Lusa.

ALSO READ: Supermarkets held by Sonae and Satya Capital in Maputo close, file for insolvency

S2 closed its three supermarkets in the Mozambican capital on Tuesday and filed for insolvency. S2 which is 30% owned by the Portuguese group Sonae and 70% by Satya Capital, which is in turn owned by the Sudanese telecommunications magnate Mo Ibrahim.

“As a minority shareholder, in a negative cash flows scenario, we cannot prevent the company’s insolvency outcome,” added the Sonae source. S2 has been operating in the Mozambican market since 2016.

Lusa reports that the ‘Central’ supermarkets in Jat Building, Maputo CBD, Avenida de Angola and Bairro do Zimpeto remained closed on Tuesday. Security guards at Jat Building told Lusa that the supermarket operated normally on Monday and that workers were caught by surprise by the closures.

A company lawyer confirmed that S2 had filed a bankruptcy plea, without giving further details.

An notice signed by the president of the company, Miguel Seixas, says that the situation forced the company to file an application for insolvency before the Judicial Court of the City of Maputo.

“There were negotiations with potential interested parties for the acquisition of the business, but no offer was actually made, mainly because of high fixed operating costs given the country’s current economic situation,” the notice reads.

S2 states that the legal proceedings instituted in connection with the application for insolvency would result in the payment, “if possible”, of the company’s debts, including its responsibilities towards its employees.

A source close to one of the workers told Lusa that salaries had been paid on time and only payments related to termination of contracts remained outstanding.

Source: Lusa