French Luxury Company dips fingers on Botswana paradise
A gigantic French company with a penchant for multinational luxury products is in for a takeover of three safaris located in the tourism rich paradise in the northern part of Botswana, BusinessPost has established.
LVMH Moët Hennessy Louis Vuitton SE also known as LVMH is registered in Paris, France. The Euronext Paris listed company is controlled by the Arnault family. On top of the company is its chairman cum CEO Bernard Arnault, the fourth wealthiest man according to Forbes Magazine, who runs the company with his children; daughter Delphine is Bernard’s number two and Antoine is head of communications.
Bernard’s third child Alexandre runs German luggage brand Rimowa, which LVMH bought in 2016 while his fourth child Frédéric is a strategy and digital director of TAG Heuer, the largest watch brand owned by LVMH. The Arnault family owns a stake of 47 percent in LVMH through the family holding company called Groupe Arnault.
LVMH is known for luxury brands like the fashion house and luxury retail company known for leather clothing, Louis Vuitton. The other luxury brands by LVMH are the plush winery producer Moet and the elite cognac brandy of Hennessy. The company also has investments on real estate and hotel sectors. And according information seen by this publication, LVMH will soon be the owner of some accommodation property in Botswana in the form of 5 star rated safari lodges which are owned by Belmond, a company that is being purchased by the French company.
Last year the French company said it is planning on acquiring Belmond for $25.00 per Class A share in cash and this represents an equity value of $2.6 billion in a transaction with an enterprise value of $3.2 billion. The company revealed that time that the transaction would be completed in the first half of 2019 subject to the approval of Belmond’s shareholders and clearance by the relevant competition authorities.
It has emerged that Belmond has agreed to give the luxury dealer all its shares, meaning LVMH will now have sole ownership of the three safari lodges in Botswana; Belmond Kwai River Lodge, Belmond Savute Elephant Lodge and the Belmond Eagle Island Lodge. The three safari lodges were owned by Belmond. Belmond was partially owned by LVMH which indirectly owns the company (Belmond) with BlackRock Inc, Dimensional Fund Advisors LP, Capital Research Global Investors, The Vanguard Group, Southeastern Asset Management Inc and Giuseppe Statuto.
Belmond whose directors are; Roland Hernandez, Harsha V. Agadi, Mitchell Hochberg (all American), Ruth Kennedy, Ian Livingston, Demetra Pinsent, Gail Rebuck (all British) and H. Roeland Vos (Belgium) is listed on the New York Stock Exchange. Apart from owning safari lodges in Botswana, Belmond is a luxury hotel company and adventure travel operator that operates 46 properties which include 33 deluxe hotels, 3 safari lodges, one stand-alone restaurant, seven tourist trains and two river/canal cruise businesses. Belmond also operates famous trains and cruises in Europe, Peru and Asia.
LVMH is expected to add luxury, a word synonymous with the French company, to the already 5 Star rated plushy Belmond lodges located between the Okavango Delta, the rich tourist attract area of Moremi Game Reserve and the wildlife thronged Chobe National Park.
The Belmond safari lodges in Botswana are part of the group’s world operations which translated a revenue improvement of $1.1 million, from $35.6 million to $36.7 million. The marginal increase in Belmond’s world operations revenues are said to be due to impending of refurbishment at Belmond Savute Elephant Lodge which was closed from November 2017 to June 2018.
Belmond recorded total revenues of $572 million and adjusted EBITDA of $140 million in the twelve months ended 30m September 2018. Belmond’s Net losses for the full year 2018 were $28.5 million ($0.28 per common share), compared to net losses of $45.0 million ($0.44 per common share) for the full year 2017.
This publication has not been able to get Belmond and LVMH’s take on this recent acquisition which will see the French’s biggest luxury company lonely spreading its wing into Africa and specifically Botswana’s paradise which is the region’s tourist focal point. The local antitrust body, Competition Authority, is expected to rule on the Belmond-LVMH merger. LVMH is said to have given the local antitrust body notification for its intentions to acquire Belmond-a move which will see the French luxury company take full control of three safari lodges ploughed on Botswana’s tourist area.
LVMH chairman Arnault said in the company’s website last year that the acquisition of Belmond will significantly increase his company’s presence in the ultimate hospitality world. “Belmond delivers unique experiences to discerning travelers and owns a number of exceptional assets in the most desirable destinations. Its heritage, its innovative services, its excellence in execution and its entrepreneurship resonates well with the values of the Group and is complementary to our own Cheval Blanc maisons and the Bvlgari hotels activities,” said Arnault in the company’s website.
In an interview with BusinessPost Belmond head of communication, Jocelyn Betts said LVMH taking over the company does not mean its operations will change as Belmond will still own the three safari lodges. “Belmond has three luxury lodges in Botswana and we do not anticipate any foreseeable change to our portfolio in this market as a result of the transaction with LVMH. Under LVMH ownership, we look forward to taking our brand to new heights and to continuing to expand our portfolio of luxury travel experiences,” said Betts.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.