JOHANNESBURG, Aug 29 (Reuters) – South African grocery retailer Pick n Pay said on Thursday that proceeds from listing its discount grocery chain Boxer could total 8 billion rand ($450 million), according to its preliminary estimate.

Chief Executive Sean Summers is tasked with reviving through a turnaround and two-step recapitalisation plan a retail business that has been losing market share to bigger rivals Shoprite and others for more than a decade.

A deterioration in the performance of the group’s core Pick n Pay supermarket business resulted in a substantial trading loss in the Pick n Pay division of 1.5 billion rand in its financial year that ended Feb. 25, and an overall loss at group level of 3.2 billion rand.

At the same time its net debt escalated.

In order to lower its debt and strengthen the underlying performance of its Pick n Pay Supermarkets business, the group recently raised 4 billion rand through a rights issue and will now begin the process of listing Boxer towards the end of 2024, subject to shareholder and final board approval.

Details of the number of shares in issue, price and target amount will be shared closer to the time, but “for illustrative purposes only, the share issue will generate 8 billion rand in proceeds,” the retailer said in a statement.

“The Boxer IPO (initial public offering) will also ensure that Boxer is accorded a market value that appropriately reflects its growth trajectory and return on invested capital, thereby unlocking shareholder value embedded in the Group,” Pick n Pay said.

($1 = 17.7700 rand)

(Reporting by Nqobile Dludla; Editing by Susan Fenton)