Mozambican food retail group S2, which was owned 70% by Satya Capital, a group of Mozambican investors, and the remaining 30% by Portugal’s Sonae group, has closed down its three Central brand supermarkets in Maputo and moved ahead with insolvency proceedings.
Portuguese group Sonae planned to continue investing in Mozambique but its minority stake in S2 did not allow it to overcome the situation, Portuguese business newspaper Jornal de Negocios quoted a source as saying.
“The insolvency proceedings result from the impossibility of reversing the majority shareholder’s decision to stop financing the company’s business plan,” a source from the Sonae group told the newspaper.
The source added that “as a minority shareholder, in a scenario of negative cash flows, we cannot prevent the company’s insolvency outcome.”
The chairman of the company, Miguel Seixas, stated in a notice quoted by Portuguese news agency Lusa that he was forced to request insolvency at the Maputo City Judicial Court because of “the impossibility of continuing to operate in the Mozambican market” due to “a sharp drop in household consumption.”
The current situation has led to a deterioration of the company’s economic situation, due to a drop in sales since the beginning of the operation in Mozambique and high production costs, said the chairman of S2.
S2’s three supermarkets, which had been acquired following the previous owner’s insolvency, opened in 2016. (macauhub)