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Cresta investors approve P230 million property acquisition

Investors in Botswana Stock Exchange Listed and the country’s leading hospitality group Cresta Marakanelo Hotels have given a green light to a move that seeks to acquire four properties currently housing their hotels from Letlole La Rona (LLR) and one from Botswana Hotel Development Corporation, a subsidy of government wholly owned Botswana Development Corporation (BDC).

Cresta has been operating the hotels on lease agreements with the property owners. The current tenancy of the properties is provided for by a 10 year lease agreement which expires at the end of June next year .The leases are held on a fixed rental deal with an annual compounded escalation. At the Extraordinary General Meeting held on Thursday 14th February 2019, attending shareholders of Cresta wholly voted in favor of the proposed transactions.

Cresta reported on Wednesday February 20th that the meeting was duly convened and met the quorum requirements in terms of the Company’s Constitution and the BSE Listings Requirements. Shareholders holding a total of 98,808,924 shares were represented at the EGM either in person or by proxy, representing 75.6 percent of the shares eligible to vote at the meeting and 53.4 percent of the total issued share capital.

All attending shareholders wholly voted in one voice to approve that Cresta enter into the Transaction in terms of which it will acquire Tribal Lot 141, Maun which houses Cresta’s North East flagship offering Riley’s Hotel, from Botswana Hotel Development Corporation (BHDC), a subsidiary of Botswana Development Corporation Limited (BDC).

The EDM also voted as a whole to  approve that Cresta enter into the Transaction in terms of which it will acquire Plot 50719 Gaborone  which hosts , Cresta Lodge  and Plot 6384 Francistown  of Cresta Thapama as well as  Plot 1169 Gaborone  which houses Cresta ‘s monumental hospitality outfit ,  President Hotel in Gaborone Main Mall, all from which will be acquired  from Letlole La Rona Limited

Shareholders further okayed another move that will see Cresta acquire  a portion of Plot 276 Selebi Phikwe which currently houses  Cresta Bosele Hotel , also from  the BSE listed property group  Letlole la Rona Limited. The announcement by Cresta follows another announcement by Letlole la Rona last week which concedes to the proposed deal.

In a statement released on the 15th February LLR revealed that its Extraordinary General Meeting of unit holders held on Tuesday February 12th approved a move to dispose the four commercial immovable hotel properties. 44 Unit holders were represented, either in person or by proxy, mirroring a total 269, 948, 596 linked units which represented 96.415 percent of the securities of the company. Unit holders who held 84 470 , 785 linked units , 30.7 percent of the total securities in issue cast a voted of which 37 voted in favor of the resolution.

The three companies taking part in this transaction, are considered related parties as Botswana Development Corporation wholly owns Botswana Hotels Development Corporation holds 65.79 percent of Letlole La Rona, while the latter owns 27 percent of Cresta Marakanelo Hotels. At the LLR meeting Botswana Development Corporation which holds an aggregate of 184, 199, 963 units was not excluded from voting.

The BSE listed Cresta Marakanelo  Group has been receiving increased competition from new market entrants has been registering  declining sets of results in cash flows and revenue base also for during the year 2017 and 2018 H1.  This also was explained by Cresta as attributable to reduced government spending during the said trading period emanating from sluggish economic growth. Following subdued performance on overall in 2017 trading year the Group started the year 2018 on a slow note, unaudited financial results for the first six month of the year mirrored contracted set of figures with total assets and equity gown down the cliff by 3 percent.

According to the financial results for the six month ended June 2018 Cresta ended the half year on cash resources of P45.3 million compared to P51.0 million gathered in the corresponding 2017 period. Cresta Marakanelo Limited which operates in excess of 10 hotel and lodges registered another depressed performance in Cash flows, during in 2018 H1; operating activities collected P20.2 million, a significant decline when compared to P25.7 million realized at the end of first half year 2017.

The hotel properties  transaction which is estimated at over P230 million for LLR held units  is viewed as a major deal that will further dispatch Cresta into a leading role in the country’s hospitality industry as it will reduce operational expenses incurred by rental payments  thus maximizing profits and expanding shareholder value.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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