New owners of People’s Trading Centre (PTC) Limited say they are unable to invest in the franchise and strategically change the business because they were waiting for a nod from the market regulator.
In a written response to a questionnaire on Thursday, the South Africa-based trading company Tafika Holdings Limited (THL) chairperson and chief executive officer Arson Malola said following the approval of the Sale and Purchase Agreement of PTC by the Competition and Fair Trading Commission (CFTC) on May 30 2022, his company began the settling of the debts it took over as the purchase price.
He said: “The business itself was and still is management-heavy with a very high salary bill. In its current state, the business is unfortunately not sustainable, especially with the uncaring culture from a section of the workforce.
“However, as you might know, PTC has so much potential if restructured appropriately and run in an efficient manner with employees that are dedicated to serve its customers. The need to restock the stores with the right range is critical.”
Conglomerate Press Corporation plc early this year disposed of its 100 percent stake in the struggling retail chain store to Tafika Holdings Limited.
A communication to PTC employees dated March 11 2022 jointly signed by Malola and PTC chief executive officer Ferdinand Mchacha said THL was acquiring PTC as foundation to its regional business.
As part of the transaction, Press Corporation took over K12.5 billion of the liabilities while Tafika inherited about K6 billion of the debts in lieu of the purchase price.
Malola said while Press Corporation’s re-capitalisation of K12.5 billion is a good start, more capital needs to be injected beyond the K6 billion that Tafika has committed to paying off the outstanding debt.
“Unfortunately, in the meantime, monthly bills were piling up and the stock levels plummeting which means that the revenue generated was also low to support the monthly expenses,” he said.
In the past 20 years, PTC has been closing down stores from over 135 nationwide to 20 stores confined in Lilongwe, Blantyre and Zomba.
Of the 20 shops, operating under the brand names of Spar, People’s Metro, People’s Express and Food Lovers Market, seven have since been disconnected from Escom power due to non-payment of bills.
The Nation observation confirmed that some of shops are using standby generators to operate while others are not opening for business they have run out of stock.
One of the employees, speaking on condition of anonymity, said about 615 staff at the retail chain store are yet to get their June monthly salaries and that there is no assurance from management on their benefits.
Meanwhile, staff has been gathering outside PTC headquarters in Blantyre to seek an address from management.
In a circular dated July 1 2022 to all employees, Mchacha said the company temporarily closed most of its stores from July 2 to 31, 2022 to give management and the shareholder the necessary opportunity to re-brand all SPAR stores to Peoples Stores, reconfigure and give space for the much-needed equipment maintenance.
“This period will also give management and the shareholder an opportunity to address various staff issues which include; payment of June 2022 salaries, pension contribution arrears, Sacco remittances arrears, Medical Aid Society of Malawi contributions arrears and demands for severance allowances,” he said.
In an interview on Monday, Press Corporation acting chief executive officer Lyton Chithambo said the deal was finalised.
“The deal had structure that PCL honoured its part and settled the K12.5 billion,” he said.
Registered in 1973, PTC was the first retail chain store to operate in Malawi.