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BBS Limited registers shares worth over P480 million on BSE

Following its demutualization from a building society converting into a limited company in April this year BBS now Botswana Building Society Limited (BBSL) is transiting progressively to becoming the country‘s first home grown and indigenous commercial bank.

BBS limited this week became the first company to be registered on the Botswana Stock Exchange Limited (BSEL) Serala OTC Board. When giving welcome remarks at the registration bell ringing ceremony held at the BSEL headquarters in Gaborone, BSEL Chief Executive Officer (CEO) Thapelo Tsheole  said BBSL made history by becoming  the first company to register shares on  the Serala board  which was set up last year for public interest companies  to register shares outside the normal channels of the main bourse .

Companies can only be registered on Serala Board for a period not exceeding five years. Tsheole explained that BBS shares will be traded like any other shares listed on the BSE market however with lesser and relaxed requirement compared to companies trading on the main equity board. “The difference between listing on the main board and registering shares on the Serala board is that in this case, BBS will not have to deal and comply with steep stipulations and listing requirements like companies listed on the main board,” he said.

Thapelo Tsheole further noted that at a later stage BBS Limited will migrate and graduate into the main board for complete and full listing in the equity share market. BBS Limited Managing Director, Pius Molefe observed that the registration of Botswana’s home grown financial services provider was a historic occasion that will give birth to greater strides for the company. “This is the most gratifying and exciting moment in the history of our organisation “he said.

Molefe explained that BBS directors decided to apply for a registration of shares on the Serala OTC Board to raise the regional profile of BBS and its brand as a local financial institution, to improve the liquidity of the shares of the company as well as to allow investors in the company to have a basis to determine the market value of their investment on an ongoing basis. Molefe said BBSL will also provide them with access to liquidity in the event that they wish to exit their investment.

He explained that the registration mirrored an introduction of up to 487 014 002 ordinary shares of no par value which is equivalent to BBS Limited capital of BWP 487 014 002.00, will be available for trading within Batswana and current shareholders who wish to sell.
Molefe reiterated that BBSL’s plan is to graduate into the listed equity board within 18-20 months of operating as commercial bank.

On the 24th August 2014 BBS Shareholders resolved to approve a demutualization process, which converted a building society into a public company incorporated in terms of the Companies Act. On the 26th April 2018, BBS was converted into a company limited by shares, under the name BBS Limited.  The Company intends to apply for a banking licence in terms of Section 6 of the Banking Act.

 If BBSL licence is granted, the company will be the first bank in Botswana to be majority owned and controlled by citizens of Botswana giving it a competitive advantage to be able to craft and create bespoke tailored products suitable to the unique needs and requirements of Botswana and Batswana. As a building society, the Company already had a strong business presence and the expansion of banking services offered will only increase its presence and market share in the economy.

The exceptional growth of BBS over the past 40 years can best be measured by the phenomenal increase in reserves from inception to the present P220 million in March 2017. The statutory reserve alone increased from a mere P200 to almost P119 million over this period. BBS has consistently met its dividend obligations to its shareholders every year over the past 40 years of its existence, and occasionally, has paid bonus dividends. Late last year BBSL secured a loan amounting to over 250 million pula from the International Finance Corporation (IFC) to finance its expansion into financial inclusion products.

 BBS said during the loan transaction that the funds would be used to promote its financial inclusion quest and access to housing finance in Botswana. BBS is a traditional financing partner to ordinary and middle income earning Batswana with products tailored for low earning households and informal small entrepreneurs.  The investment   comprised of a senior loan equivalent to $25 million in local currency.

Still at the historic registration ceremony BBSL Board Chairman, Taolelo Mosetlhi said the entire process of converting a society into a public company and proceeding to putting up shares for trading on the competitive and growing stock market that BSEL is, was a great achievement for the company. He shared that the registration of shares in the Serala Board was the beginning of an existing journey of transforming what was once a small society into a proudly indigenous bank  by in large owned by Batswana.

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Grit divests from Letlole La Rona

22nd March 2023

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.

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Stargems Group establishes Training Center in BW

20th March 2023

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.

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Food import bill slightly declines

20th March 2023

The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.

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