Sub-Sahara Capital Group (SSCG), the investment group that has interests in Gain Cash & Carry and Edgars, is taking over stricken wholesaler Metro Peech & Browne.
SSCG, which has ties to the shareholders of Innscor, will inject US$13.5 million into a special purpose vehicle (SPV) to restart Metro Peech, which went into corporate rescue in September weighed down by debts. Corporate rescue practitioner Oliver Mtasa of accountants Crowe says SSCG was the best pick out of multiple bidders for Metro Peech.
“Furthermore, it is considered more financially viable to commence a new venture from the ground up, which would necessitate an estimated capital infusion of around US$15 million. SSCG will inject at least US$13,5 million into the SPV,” Crowe says.
At least ten investors were ready to buy Metro Peech. According to Crowe, the bids were assessed “on the basis of both the financial and the qualitative factors for the provision of a sustainable business model going forward”.
Adds Mtasa: “It is on the basis of this assessment that the Sub-Sahara Capital Group (SSCG) bid was considered acceptable. SSCG is a significant player on the market with investments in wholesale and retailing, agriculture, mining, financial services, tourism, human resources and manufacturing. The assets of Metro Peech and Browne will be acquired by an SPV and employees will be transferred to the SPV.”
The wholesaler has now closed for a while to allow stock takes, rebranding and a systems upgrade.
Gain already has over 60 branches countrywide, and now adds Metro Peech’s 17 outlets to its network.
At the time Metro Peech was put under business rescue, it had assets of US$12.8 million but liabilities of US$21.7 million, leaving a gap of US$8.8 million. Of the US$21.7 million that it owed, it had debts of US$9,835,088 to suppliers, banks US$5.4 million, and US$5 million of intercompany and other liabilities. It owed staff US$ 229,000 in unpaid salaries.
In 2013, Spear Capital, a private equity fund from Norway, invested in Metro Peech, putting in capital and taking up 39.2%. Other shareholders are Midosa Investments (40%) and Sean Baker, who holds 20% of the firm. Founders include Miles Peech and Barry Browne.
Who is SSCG?
SSCG is a private fund based in Mauritius.
The transaction extends SSCG’s reach in the wholesale business. It took up an interest in Gain Cash & Carry in 2016, when the wholesaler was set up by taking over Natfoods depots as the Innscor subsidiary exited the wholesale business. In 2020, Natfoods was fined by the Competition and Tariff Commission for filing an application for the transaction after it had been completed.
SSCG in 2019 bought a majority stake in Edgards Zimbabwe from South Africa’s Edcon.
In 2022, SSCG also bought Innscor’s stake in Capri and was, according to a regulatory filing last year, a shareholder in Mafuro Farming, an Innscor subsidiary. Previously, SSCG was invested in Vast Resources, which later sold a mine to Padenga, a company that has common shareholders with Innscor. Matt Hosack, who sits on the board of Padenga’s gold subsidiary Dallaglio, is one of the founders of SSCG.