Botswana’s antitrust body has approved the proposed disposal of all the manufacturing assets of Can Manufacturers to Nampak Products Ltd and a yet to be formed Special Purpose Vehicle (“Newco”), which will be jointly controlled by Botswana Development Corporation and Nampak Limited.
The Botswana Competition Authority determined to conditionally authorise the proposed transaction in the market under consideration that there are no competition concerns that will arise as a result of the implementation of the proposed transaction and that it is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market under consideration.
The approval comes almost two months after the acquiring entity made a bid for the struggling Can Manufacturers. Nampak Products is Africa’s leading package company from South Africa, and is wholly owned by the Johannesburg Stock Exchange listed Nampak Limited (incorporated in South Africa).
Nampak Products exports rectangular cans and lids, and large round cans from South Africa into Botswana. Some of the top shareholders of Nampak Limited are Allan Gray Investment Council; The Government Employee’s Pension Fund; Lazard Asset Management LLPC Group; Somerset Capital Management; and Visio Capital Management.
Can Manufacturers is a wholly owned subsidiary of BDC opened in 2008 at an investment of P128 million. The company’s operations are based in Lobatse. Can Manufacturers produces and supplies a range of cans for packaging of food items. The company produces cans in different sizes and specifications for the intended contents including dairy, meat, fish, fruit, vegetables and other food variants. Specifically, Can Manufacturers produces and supplies tinplate food cans and Endomat tinplate cans. The company is located in Lobatse and supplies cans throughout Botswana and South Africa.
BDC, wholly owned by the Government of Botswana, is a development finance institution founded to promote and facilitate the development of industrial, commercial, and agricultural enterprises within the framework of the Government of Botswana's plan for economic development. Under the leadership of Mr. Bashi Gaetsaloe, BDC turned around its fortunes after it implemented the Transformation programme which begun in 2014, shortly after Mr. Gaetsaloe was appointed the managing director.
Under the Transformation Programme, BDC returned to profitability after previous historic loss making position. Part of the Transformation Programme initiatives included revision of all major processes to reflect industry best practise; revision of risk management and governance policies; revision of legal agreements; deployment of a new organisational structure and right-sized the organisation; and, recruitment of new skills and capabilities, including the key roles of Chief Risk, Chief Operations and Chief Audit.
The Transformation Programme also focused on addressing key issues of restructuring BDC Group’s portfolio and balance sheet. In its 2015 annual report, the group says it has successfully completed Wave 1a of their divestment strategy and has commenced Wave 1b and Wave 2 of this strategy. BDC said that the strategy has not only raised cash for the Corporation, but has also empowered Batswana as most of these businesses ended up in the hands of local citizens.
The approval of the deal by Competition Authority carried conditions that fit in with BDC’s divestment strategy that entails citizen empowerment. One of the conditions is that Nampak Southern African Holdings Ltd (“NSAH”) shall sell shares in Newco of not less than 10% but not more than 20% to a citizen of Botswana controlled entity or citizen of Botswana within 12 months upon implementation of this transaction
While there had been fears that the merger will result in job losses especially at a time when the country is grappling with retrenchments and unemployment, the antitrust body placed a strong condition that will guard against such occurrences.
“The end line business will not relocate out of Botswana and shall remain a manufacturing business and not change into a sole distribution business. In the event that market circumstances change to the point where NSAH resolve to exit the market in Botswana, NSAH shall notify the Authority of their intention to sell the company as a going concern to interested parties,” the authority said.
This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.
“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.
Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.
A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.
Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.
A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.
Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.
In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.
The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.
In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.
Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.
The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”
In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.
Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.
The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.