Fast Moving Consumer Goods (FMCG) distributor, CA Sales officially listed on the Botswana Stock Exchange (BSE) this Thursday, at exactly 0950 BSE Chief Executive Officer Thapelo Tsheole and CA Sales CEO Mr. Frans Britz, rang the bell to mark a watershed moment in the company’s history – listing on the Domestic Main Board of BSE, one of the stable and significantly growing stock markets in Africa.
According to the CA board, 376 IPO applications totaling to 146 191 572 shares were received from invited investors and the public by 1st November 2017 for the available 136 112 994 ordinary shares of P3.45 each on offer. “The successful public applicants will be allotted ordinary shares equal to their applications, thus they will receive the number of ordinary shares applied for in full. The invited investors will receive a pro-rata allocation of their application”
BSE CEO, Tsheole says the Stock Exchange outperformed its target of attracting two companies this year after listing Australian Minergy, Get Bucks amongst other companies, and now CA Sales. “We have to thank the CA Sales board, they could have easily went for instance to the Johannesburg Stock Exchange (JSE), but they chose the BSE because they have confidence in our stable economy and its prospects for growth.”
Tsheole revealed that the BSE will in a few months list several other multinational corporations of global repute. The chairman of CA Sales, Mr. Johan Holtzhausen commended the BSE for high level of professionalism and competence. “When we began this process of listing the BSE team proficiency and level of seriousness and world standard ethics & etiquette was so heartwarming,” he said.
Holtzhausen added that CA Sales was a Southern African company with total employees of around 8000, with 1500 of them being in Botswana. “We have a turnover of P2 billion and we thank our suppliers, retailers and all stakeholders as we embark on continued journey of expansion and ensuring growth in our share value to give our investors return of investment,” he said.
The current shareholding of CA Sales now stands at PSG Africa Holdings (Proprietary) Limited: 214 057 200 shares which is 51%; Export Marketing Investments (Proprietary) Limited holds 42 200 690 shares which translates to 10.1%; while renowned and one of the founders of CA Sales, Jagdish Natwarlal Shah now owns 10 739 190 shares , which is 2.6%. It is reported that Shah pocketed over P30 million from the listing. Bielkor Beleggings (Proprietary) Limited, 8 587 600 shares 2% and Repassen 21 (Proprietary) Limited controls 4 097 940 shares or 1% and the same applies to Rose Bridge 15 (Proprietary) Limited. The Public as defined in the BSE Listing requirements owns 136 112 994 shares which is 32.3%.
The company has appointed to its board of non-executive directors the Chief Executive Officer of Bona Life and shrewd industry leader, Reginah Sikalesele-Vaka as well as former Debswana Managing Director, Blackie Marole. Vaka is former Chairperson of the BSE Main Committee. When officiating at the listing celebration at the CA Sales offices the Vice President Mokgweetsi Masisi said it was worth noting that Botswana’s economy was challenged but thanked the CA Sales board for having confidence in the stability of Botswana business environment. “We have abundant capital from our pension funds thus more companies should follow CA Sales, Get Bucks and others by listing on our domestic bourse main,” he said. Masisi commended the BSE leadership for continuing to carry out their mandate with evident delivery. CA Sales distributes products from companies such as Tiger Brands, Unilever SA, Nestle, Kellogg’s, Nampak, Aspen, Colgate Palmolive, Pioneer Foods and South African Breweries across Southern Africa. The company started operating almost three decades ago in Botswana as CA Enterprises and went on to acquire then competitors, Dafin Sales and Kalahari sales to birth CA Sales & Distribution. In 2011 it was incorporated as a private company under South African laws. Last year CA Sales registered profits of over R170 million.
Botswana Stock Exchange changes name as it demutualizes
Meanwhile the Botswana Stock Exchange (BSE) has begun a process to demutualize and transform into a public company. In a statement dated 7th November BSE is in the final consultation on the brainstormed names the new stock exchange will bear. The statement reads that substantial progress has been made in the much anticipated demutualization of the BSE which will see the conversion of the BSE from being a statutory body to a public company. BSE says the valuation of the Exchange has been completed and due process of awarding shareholding by the Minister of Finance and Economic Development will commence. “This milestone will officially separate ownership rights and trading rights of the Exchange and will be in line with global trends.”
Given this background, post demutualization, the Exchange will assume a new name. The BSE Transition Act of 2015 states that ‘the company may use Botswana Stock Exchange Limited as its company name and be legally designated as such for all purposes’. However Exchange House says the Act is not prescriptive on the name as it allows the BSE to assume a name that suits the requirements of the Exchange, particularly its vision to become world class. Internally the BSE leadership and management came up with few nomenclatures in suggestion of naming the new entity, Botswana Stock Exchange Limited (BSE Ltd) ,Botswana Securities Exchange (BSX), Botswana Securities Exchange Group (BSE) and Botswana Securities Exchange Holdings (BSE).
The statement from the BSE also notes that the proposed names are informed by research, brand identity, the need to be world class as the vision of the BSE prescribes, and the trends in the local securities market thus they call on stakeholders to share their views and brainstorm further names that can best suit the shape of the new demutualized public company.
“The naming of a national stock exchange is a matter of public interest; we would like to hear your views on the proposed names as a valued stakeholder,” reads the statement. The Botswana Stock Exchange Main committee will in finality and having taken stakeholders views into account make the final decision and appropriate recommendation to the Minister.
In the coming months prices will go up and inflation will shoot sharply above the target of 3 percent to 6 percent towards the third quarter of 2021, the Bank of Botswana on the other hand will continue to withhold its knife on the Bank Rate. This is according to a forecast made by Kgori Capital in its recent Market Watch Segment.
Statistics from Statistics Botswana show that the recent 1.8 percent increase in the September inflation, from 1 percent in August, was a reflection of the upward adjustment in public transport fares (Transport (from -6.9 to -3.9 percent) in September 2020, which is estimated to have increased inflation by approximately 0.64 percentage points.
Local anti-trust body, Competition and Consumer Authority (CCA), this month received back to back acquisition proposals from South African clothing retailers to wipe out their former rivals, Edcon, from Botswana malls.
Last week BusinessPost was in possession of Merger Notice No 23 of 2020 whereby a South African clothing retailer owner, Retailability Proprietary Limited, through Oclin Proprietary Limited, proposed to acquire parts of the Edgars business conducted by Edcon in Botswana (through Edcon Botswana), as a going concern, consisting of certain assets and identified liabilities.
South African government’s Business Rescue Practitioners earlier this year announced that Retailability will buy Edgars, after the latter filed for a business rescue plan in April after it failed to pay suppliers. This move will see Retailability add Edgars to its portfolio consisting of brands such as; Legit, Beaver Canoe and Style.
Retailability landed on Botswana shores 18 years ago with its flamboyant urban fashion Style which had 17 stores. Style, having almost the same target market as Edgars as it offers men’s and ladies’ contemporary and formal fashion, gave the 91 year old legendary clothing retailer a run for its money, and has won the battle as its parent company has taken over Edgars.
Retailability brands are synonymous with Botswana shopping centres and there are currently five (5) Beaver Canoe stores, 10 Style stores and seven (7) Legit stores across this country. The Beaver Canoe stores sell clothing apparel for men and boys only. The Legit stores have a fashion store format which focuses on the retailing of clothing, footwear, accessories, colour cosmetics and cellular products.
Retailability operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and Eswatini. Many observers suggest that because of the deal with Retailability to swallow Edcon, most Edgars stores in Botswana will change their name and be branded Style. A sad tale for religious consumers of the Edgars trademark who got used to love their favourite brand for years.
According to CCA’s Merger Notice No 23 of 2020, Retailability is controlled by Clifford Raymond Lines (through a company which functions solely as a holding company of his interests in Retailability) and Metier Investment and Advisory Services Proprietary Limited (“Metier”). Metier is a private equity enterprise with investments in a number of industries spanning from healthcare, hospitality, FMCGs and telecommunications.
Retailability directors are mostly South Africans; Clifford Raymond Lines, Mark Richard Friday and Norman Victor Drieselmann. Only Nasreen Essack, who was appointed February this year, is a Motswana. He comes after Brian Thuto Tsima left on the same date. Retailability 100 percent owns Oclin Proprietary Limited, the company it is acquiring Edgars with, by a capacity of 3000 shares.
The target business, Edgars, offer textiles, cosmetics and cellular products. Edcon has a Motswana director, Charles Mzwandile Vikisi, a South African, Shane Van Niekerk and Zimbabwean Jethro Kamutsi.
“The Target Business comprises of two (2) Edgars franchise brands and private label stores across Botswana. These stores target middle to upper income customers and are home to a range of private label brands such as Free2BU, Charter Club and Stone Harbour, and a wide range of market label brands (such as Levi’s and Guess) for clothing, footwear and cosmetics.
In addition, the Target Business operates iconic Edgars Home and Edgars Beauty stores as store-in-store formats rounding out the department store offering in Botswana,” said CCA. Foshini also lines up to take Jet Botswana from Edcon.
The Foschini Group (TFG) released a statement confirming its latest intentions to acquire Edcon assets or Jet for a cash purchase consideration of R480 million. This was after the business rescue practitioners offered TFG to buy Jet by that amount.
CCA is currently mulling on a proposed merger by TFG to take over Jet operations in Botswana. Merger Notice No 21 of 2020 from TFG came a few days before the Retailability proposal. In this merger TFG, acting through Foschini Botswana, want to take over “parts” of the Jet business conducted by Edcon through Jet Supermarkets Botswana.
TFG will be willing to add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents. TFG will also get Jet’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. Also part of this fat deal is that the company is looking to also acquire JET Club and all existing JET stock of no less than R800 million.
Johannesburg listed TGF owns Foschini Retail Group which owns the local operations called Foschini Botswana, the acquiring enterprise according to CCA merger notice. “TFG is not controlled by any enterprise/s and for completeness, the three largest shareholders of TFG holding shares greater than 5% as at 27th March 2020 are: Government Employees Pension Fund (16.2%) Public Investment Corporation (13.2%); Old Mutual Limited (6.7%); and Investec Asset Management (6.3%). The remaining issued share capital in TFG is widely held,” said the merger notice.
Only Abdool Rahim Khan is a Motswana in the Foschini Botswana directorship, the rest; Ganeswari Shani Naidoo, Anthony Edward Thunström and Gustav Jansen (alternate director) are South Africans.
According to the CCA merger, the Jet Business is Edcon’s discount department store division, selling clothing, footwear, homeware and some cosmetics as well as cellular products and targets lower-to-middle income consumers throughout Botswana. The Jet Business does not directly or indirectly control any enterprises, says the notice. CCA seeks any stakeholder views for or against the proposed merger, which may be sent within 10 days from date of this publication to the following address.
Botswana Communications Regulatory Authority BOCRA signed a memorandum of Agreement (MoA) with the Ministries of Transport and Communications (MTC), Basic Education (MoBE) as well as Local Government and Rural Development (MLGRD).
The MoA seeks to continue the collaboration that dates back to 2016 when the three parties first agreed to work together in a project aimed at computerizing and providing broadband Internet to primary schools in remote and underserved areas of Botswana.
The project benefitted 68 primary schools and 9 secondary schools through the construction of Local Area Network (LAN) in each primary school, provision of 5 Mbps dedicated broadband Internet to each Primary School and provision of Wi-Fi enabled tablets, laptops and related peripherals such as printers and copiers.
Further, the project will see the augmentation of computers in 9 Junior Secondary Schools with 30 laptops per identified school and employment of Information Technology (IT) officers at each primary school.
When speaking at the signing ceremony in Gaborone, Chief Executive of BOCRA and Chairperson of Universal Access and Service Fund (UASF) Board of Trustees Martin Mokgware said the project’s ultimate goal is to facilitate pupils in schools and host villages to be able to play a meaningful role in the digital economy.
Mokgware indicated that this necessitates upgrading of existing Telecommunications infrastructure to high capacity broadband that will support delivery of education, accessibility to the quality Internet and usage of ICTs.
The Fund began its inaugural programme by sponsoring the provision of WiFi hotspots in public areas around the country as its first project. Following the successful implementation of public WiFi hotspots, the Fund identified Kgalagadi, Ghanzi and Mabutsane areas for mobile network upgrades, schools computerization and internet provision.
Conscious that the project would not be possible without buy-in and support from MoBE, MTC and MLGRD, the Fund facilitated the signing of the first MoU between the three parties in 2016 for implementation of the project.
BOCRA Chief Executive said the signing of this agreement is aimed at benefitting the Kweneng District, adding that they have already assessed the area and have determined that they will be covering 62 underserved villages and 119 schools, 91 of which are primary schools.
“This is a project for which the partner Ministries need to re-commit for its success. Lessons from the previous schools’ computerization and internet connectivity project require that we increase our involvement and resources dedicated to the project for it to be successful. It is my belief as the project coordinator, that we will not do things the way we did them during the first project, for if we do, then we will not have learnt anything,” he said at the signing ceremony.
The purpose of learning is so that there can be continuous improvement to minimize the length of time and amount of resources utilized, he said expressing confidence that their partners will step up to the plate and ensure they play their part in the implementation of the project and that it will progress smoothly having already tread along a similar path.
UASF’s role lies mainly in funding and project management. According to Mokgware, once the project is completed, the work to integrate ICTs into the classroom begins in earnest. Therefore, he said, the project will not succeed without full cooperation and oversight of partners.
“MoBE will put in place the necessary content and ensure that the curriculum is available to all. MLGRD will provide, among others, the enabling environment by ensuring readiness of the school’s infrastructure and necessary security.”