BPC, Masiyiwa partner in Telecoms venture
Business
The Botswana Power Corporation (BPC) has announced that they have entered into a joint venture for the establishment of a wholesale telecommunications service provider. The agreement will see Liquid Telecom tapping into BPC’s expansive infrastructure, creating a new telecoms network provider with extensive reach across Botswana. Liquid Telecom was selected as the preferred joint venture partner following a competitive bidding process, in which five local and international telecommunications companies submitted bids.
The agreement was signed by the outgoing BPC CEO Mr. Jacob Raleru, and Liquid Telecom Group CEO Mr. Nic Rudnick at a ceremony held in Gaborone on 18 October 2016. While details of the deal remain sketchy, it was announced however that the joint venture will operate under the name Liquid Telecom Botswana after the power utility company decided to take a stake in the newly created venture. The two partners say the structure of the deal will enable BPC to make more effective use of its existing assets, while allowing Liquid Telecom to better serve the network needs of its wholesale and enterprise customers in and outside the region.
“The use of BPC’s optic fibre network will be granted to Liquid Telecom Botswana under an Indefeasible Right of Use Agreement (IRUA). Rather than taking any rental payments, the capital value of the IRUA will be used to purchase BPC’s equity stake, which is 42.5%. Liquid Telecom will be the majority stakeholder and will, as the technology expert, be responsible for the day-to-day management of the company. The arrangement allows BPC to diversify its revenue base, while maintaining focus on its own core mandate of providing secure and reliable electricity services to the national economy,” read a joint statement from BPC and Liquid Telecom.
BPC is a state owned company responsible for the generation, transmission and distribution of electricity within Botswana. The company, as the only supplier of electricity in the country, has built an extensive network that covers almost the whole country, with particular emphasis on settlements. BPC owns and operates an optical fibre cable network that is embedded in some of its high voltage transmission lines. This fibre network will be commercialised for the first time in order to provide network services across the country.
A subsidiary of Econet Global, Liquid Telecom began life as the satellite and voice operator Econet Satellite Services, which was founded in 1997. Rebranding to Liquid Telecom in 2004, the company went on to launch the high-speed, cross-border fibre network linking southern Africa to the rest of the world in 2009. The company has since grown to provide services to more than 50 global wholesale carriers operating in eastern, central and southern Africa, Europe, North America and Asia Pacific, as well as the national and international enterprise market. Liquid Telecom supplies fibre optic, satellite and international carrier services to Africa’s largest mobile network operators, ISPs and businesses of all sizes. It also provides payment solutions to financial institutions and retailers, as well as data storage and communication solutions to businesses across Africa and beyond.
The latest venture, Liquid Telecom Botswana, joins the family of Liquid Telecom Group which operates through several African countries. Liquid Telecom Mauritius is the holding company for the Liquid Telecom Group, with wholesale, enterprise and retail operations in 15 locations across Africa and beyond. Over the last three years, LTM has invested heavily in developing and building Liquid's terrestrial fibre-optic backbone throughout eastern, central and southern Africa. The group operates Liquid Telecom DRC, Liquid Telecom Kenya, Liquid Telecom Rwanda, Liquid Telecom SA, Liquid Telecom Uganda, Liquid Telecom Zambia, Liquid Telecom Zimbabwe and Liquid Telecom UK.
Liquid telecom’s previous big deal this year involved buying the South African fixed-line operator Neotel in a deal that will create the continent’s biggest broadband network. “The shareholders of Neotel –Tata Communications of India and minority shareholders led by Nexus Connexion (Nexus) – have agreed for Liquid Telecom to acquire Neotel for ZAR 6.55bn. Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African investment group, which has committed to take a 30% equity stake in Neotel. The transaction, which is subject to regulatory approvals, is transformative and will create the largest pan-African broadband network. Through a single access point, businesses across Africa will be able to access 40 000kms of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned,” the company had said in June when announcing the deal.
While Liquid Telecom, the leading independent data, voice and IP provider in eastern, central and southern Africa, is largely unknown in Botswana, the owner of the company is well known. The company an affiliate of Econet Group, a conglomerate founded by Dr Strive Masiyiwa, an enterprising Zimbabwean billionaire who first came to international prominence when he fought a five-year constitutional legal battle leading to the removal of the state monopoly in Zimbabwe’s telecommunications sector. The landmark ruling is regarded as one of the milestones in the opening up of African telecommunications to private capital. But in Botswana, Dr Masiyiwa is well known as the man who established Mascom, the leading network service provider. However Masiyiwa has over the years reduced his stake in Mascom and he now holds a minority stake through Econet Wireless.
The new venture, Liquid Telecom Botswana, will ply its trade in a field which has been dominated by BoFINet. The latter is owned by the government, and formerly a surrogate of Botswana Telecommunications Limited Company, is a wholesale provider of national and international telecommunication infrastructure. Core to BoFiNet’s mandate is to provide and operate a world class telecommunications backbone network infrastructure through it’s more than 9000km of fibre connectivity based on an SDH and DWDM network. Industry experts say the entrance of Liquid Telecom will provide new competition which might lower the price of connectivity, especially at a time when consumers are complaining of expensive yet slow data services.
Business
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The Botswana and Johannesburg Stock Exchange listed distributor of fast-moving consumer goods
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Business
Grit divests from Letlole La Rona
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.
Business
Stargems Group establishes Training Center in BW
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.