Primarily listed on the Australian Securities Exchange (ASX) and having prospects to develop gas exploration and production projects for Serowe Coal Seam Gas Project in Botswana, Gasfields Limited will be kicked out of the Botswana Stock Exchange (BSE).
Fresh information received by BusinessPost is that the Australian coal and gas explorer has been keeping BSE on the dark about any information regarding the entity, like change of name or company directors. However the Australian media has been awash with all the latest developments about the company which has been going through transition in February this year.
Gasfields Limited is engaged in developing gas exploration and production projects for Serowe Coal Seam Gas Project in Botswana. Gasfields operates a portfolio of projects, including coal bed methane and petroleum in Botswana and coal steam gas in Australia. Gasfields is primary listed on the Australian Stock Exchange (ASX) and secondary listed on the BSE Foreign Venture Capital Board. The BSE Foreign Venture Capital Board houses small foreign companies with small business operations. For a company to be listed in the Venture Capital Board it has to have P500 000 as capital. It should also have at least 1 million shares even though it does not show any profit history.
BSE was on the dark as to the Australian explorer changing its name as it was previously known as Raven. The Australian media and investors knew about this change of name, but not the local bourse. A communication by ASX on 28 February 2019 notified the change of name by the company from Raven Energy Limited to Gasfieds Limited which is also the current name being used and incorporated in the Australian companies register. The new name was approved on 22 February 2019 in the company’s Annual General Meeting according to a communication by the company secretary Kar Chua.
Information reaching this publication is that Gasfield is planning to disinvest on BSE amidst venturing into a big US energy acquisition. According to recent communication by Raven Energy Limited, now Gasfields Limited, executive chairman Nathan Featherby Gasfield has been suspended on the ASX. “The company will remain in voluntary suspension pending an announcement in respect of the corporate activities relating to divestments in Botswana and finalization of its ongoing negotiations with respect to a potentially significant and strategic US domiciled energy acquisition,” said Featherby.
Keeping company information from BSE infringes BSE Equity Listings Requirements as it is the case of Gasfield Limited, hence the local bourse suspension of the company’s shares last week. “The market is hereby informed of the BSE intention to delist Gasfields (previously known as Raven) shares from the Foreign Venture Capital Board as per section 13.3 of the BSE Equity Listings Requirements (the Requirements),” said a communication from BSE.
According to BSE, Gasfields has failed to remedy various non-compliances with the Requirements and there are no efforts from the company to remedy the contraventions hence the BSE’s intention to delist the Company’s shares. Non-compliance being failure to release important information to BSE while a lot has been published on the ASX.
“Stakeholders are given twenty one (21) days from the date of the notice to make representation to the BSE on the proposed delisting for consideration. If no representations are brought forth by the stipulated time period, the BSE will issue a delisting order. The trading of Gasfields shares is currently halted on both ASX and the BSE,” says last week communication from BSE.
According to Bloomberg, Gasfield which was founded on 23 January 2004 belongs to the energy sector and performs on the oil, gas and coal industries. It is categorized on the exploration and production sub-industries. According to the BSE Listings and Trading Department a lot of information has been emerging about Raven change of name to Gasfield, but the local bourse was not formally informed.
Despite making its announcements of disinvesting from Botswana, the company never bothered to inform the BSE. The local stock exchange format wrote to Gasfield after seeing lack of compliance by the company but no response has been made so far. After seeing the ASX suspending Gasfield shares, BSE followed suit and further threatened to delist the company after 21 days.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”