Client challenge

Shoprite Checkers Proprietary Limited, a wholly owned subsidiary of Shoprite Holdings and the largest supermarket retailer in Africa, employs over 149 000 employees with thousands of stores and a network of distribution centres across Africa.

In line with Shoprite’s core values of recognising the valued role their employees play in their growth and success, the Shoprite Employee Trust has been established to benefit their employees. The transaction serves to retain, motivate and incentivise their employees to continue contributing towards Shoprite’s future success.

RMB's solution

RMB’s Corporate Finance Advisory team acted as financial adviser and sponsor to Shoprite and assisted with structuring the employee trust, which has issued 40 million Shoprite Checkers shares, with an estimated value of R8.9billion. The establishment of a 6.85% Black Economic Empowerment transaction through the formation of the Shoprite Employee Trust will increase Shoprite Checkers’ effective black empowerment ownership to 19.2%.

Client benefits

The Shoprite Employee Trust has been established on a non-vesting, evergreen basis which is facilitated by Shoprite Checkers on a notional basis.  Employees who are employed in the Republic of South Africa (RSA) (of which there are currently 126,000) will benefit directly through the Shoprite Employee Trust as unitholders in the trust. Non-RSA employees (of which there are currently 16,000) will in turn receive reciprocal benefits through their respective payroll.

Dividend entitlements are linked to a Shoprite Holdings dividend per share to ensure that the benefits which flow to employees are transparent. It is also to ensure that employees recognise the tangible benefits offered by the Shoprite Group in its efforts to achieve strong operational and financial results.

Client	Shoprite Checkers Proprietary Limited
Size of the deal	R8.9bn
Sector	Retail
Capabilities	Corporate Finance Advisory
RMB's role	Financial Adviser Sponsor
Country	South Africa