Tlou raises P21.8 million from new equity placement
Business
Tlou Energy Limited , a Botswana Stock Exchange listed energy outfit this week announced a watershed investment transaction that will further resource the company’s quest for revenue generating production and ultimately increased shareholder value.
The company which its core business is delivering Gas-to-Power solutions in Botswana and Southern Africa revealed on Tuesday 16th April that it has successfully completed an equity placement to sophisticated investors totaling BWP 21.8 million. According to a statement from Tlou which is also listed on the Australian Stock Exchange(ASX) as well as London Stock Exchange Alternative Investment Market (AIM) the placement has been completed at BWP0.75 per share, which is approximately a 4% premium to the closing Australian Stock Exchange share price on Monday, 15 April 2019 of AUD$0.096. Tlou further reveals that the funds have been raised from both a long term existing shareholder as well as a new Botswana based fund manager.
The Placement comprises the issue of 29,066,650 new ordinary shares representing 6.46 percent of the enlarged share capital at an issue price of BWP0.75 approximately AUD $ 0.10 or £0.055 per share. 28,000,000 of the Placement shares will be issued to an existing shareholder, The Botswana Public Officers Pension Fund, FNB Nominees (Pty) Ltd, Gaborone (BPOPF). Following this placement BPOPF will hold 47,230,769 shares of the enlarged share capital of the company, representing a 10.49 percent holding of Tlou Energy Limited.
Tlou Energy says that the proceeds of the placement along with existing cash provides further working capital for ongoing activities which includes exploration and downstream development work, continued gas flow testing at the recently Completed production wells and efforts to secure a power purchase agreement. The Placement price represents approximately a 4 percent premium to the closing ASX share price on Monday, 15 April 2019 of $0.096 and approximately a 2 percent premium to the 15 day volume weighted average price, for Tlou’s shares traded on the ASX of AUD$0.979.
Furthermore the company says placement shares will be issued within the Company’s Listing Rule 7.1 and 7.1A placement capacity, recently refreshed by shareholders at the 2018 Annual General Meeting and, as such, shareholder approval for the issue of the Placement shares will not be required. “Application will be made for the quotation of the Placement Shares to trading on the ASX, AIM and the BSE, with admission to trading on the ASX expected to occur at 9.00am on 23 April 2019 (AEST), admission to AIM at 8.00am on 24 April 2019 and admission to BSE on 25 April 2019” elaborate the company in a statement released on Tuesday.
Following admission of the Placement shares, the total number of the Company's ordinary shares on issue will be 450,180,185. The Company has no shares in treasury. This figure of 450,180,185 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.
When commenting on the equity placement Tlou Energy Managing Director Tony Gilby noted that the placement will go a long way into providing the necessary working capital for the company. “We welcome the confidence shown in the Company by the fund managers who participated in this strategic placement. It has been one of the Company’s stated goals to increase the local ownership of the company as we believe this will have long term benefits for both the local and international shareholders. It is very pleasing to welcome to our registry a new local fund manager, along with further investment by our largest shareholder, and I would like to thank them for their support,” he said.
In October last year Non-Bank Financial Institution Regulatory Authority (NBFIRA) granted Tlou Energy Limited, “local asset’’ status, The granting of 'local asset status' to Tlou was noted as a positive development, as investment and pension funds that are domiciled in Botswana would now invest in Tlou Energy’s coal bed methane (“CBM”) Gas-to-Power Project and in return Tlou Shares would now also be treated as part of the funds’ local allocation of investments.
It was observed that the granting of the local asset status would bolster Tlou Energy share demand by the local investment space and also spark investor confidence and positive performance of the company’s share price. Tlou Energy which listed on the Botswana Stock Exchange Limited main board late last year is gearing itself to being an instrumental developer of gas-to-power projects in Southern Africa using coal bed methane (“CBM”) natural gas from its gas field in Botswana.
Since establishment, the Company has significantly derisked the project in consideration of its goal to become a significant gastopower producer. The Company flared its first gas in 2014 and has a 100 percent interest over its Mining Licence and ten Prospecting Licences covering an area of 9,300 Km2 in total.The Lesedi and Mamba Projects already benefit from significant independently certified 2P gas Reserves of ~41 BCF.In addition, 3P gas Reserves of ~427 BCF and Contingent Gas Resources of ~3,043 BCF provide significant additional potential.
Business
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The Botswana and Johannesburg Stock Exchange listed distributor of fast-moving consumer goods
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Business
Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Business
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.