Spar sells Polish business to Specjal for R185m

Reuters/Siphiwe Sibeko

Specjal is a popular local Polish retailer and wholesaler established in 1990 with a reputation for growth and innovation.

The widely anticipated deal provides certainty for investors, removes loss-making business from the balance sheet and allows Spar to focus resources into its core business in South Africa as well as take advantage of new growth opportunities.

“This also gives clarity to our dedicated employees in Poland, who now have the potential to expand the business under the ownership of Specjal, a company with the requisite resources, scale, and capacity to take these assets to the next level. This is a significant milestone for the Group,” says Spar Group CE0, Angelo Swartz.

Spar’s Polish assets comprise approximately 200 retail stores, three distribution centres and one production facility.

“We are pleased to have been able to structure this sale in the agreed timeframe and are ready to take our own business to the next level by focusing on our Southern African strengths as the heart of our business,” says Swartz.

Spar operates in 11 countries, but its core South African business accounts for about 60% of group sales.

“This sale brings certainty for shareholders from a funding perspective. It creates an opportunity for Spar in Poland and our people employed there, as the purchaser is a well-known retailer and wholesaler with a strong track record. Specjal wants to scale the Spar assets in Poland and has the resources to do so,” says Swartz.

Spar will be required to recapitalise the business which is estimated to cost R2.7bn, the majority of which will be achieved by Spar settling the business’s funding debt. The agreement is subject to final regulatory approvals, and the recapitalisation will be increased or decreased, depending on the circumstances, to obtain a net asset value for the Spar Poland Group equal to PLN0 at the effective date.

“Our journey into Poland is coming to an end. However, this deal further solidifies our renewed strategic intent. Our continued focus is on harnessing our strengths, driving efficiencies, profitability and excellence,” concludes Swartz.