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BDC turnaround plan pays off

BDC Managing Director; Bashi Gaetsaloe

The Botswana Development Corporation (BDC) 2014-2019 bold turnaround plan has begun to pay off after three consecutive years of loss making.

BDC financial audited statement shows increased revenues, reduced expenses as well as a P60 million booster from subsidiary divestments, BDC registered a profit of P110 million before tax, at company level, from a loss of P67 million in the prior period.

At group level, which includes in the corporation’s  46 subsidiaries, revenues rose 19 percent to P340 million pushing profit before tax to P247 million from P36 million in 2014.

The managing director Bashi Gaetsaloe said the results bear evidence of the 2014-2019 ambitious turnaround plans, which target doubling the corporation’s P4 billion balance sheet in the period.

“FY15 has been a very successful year for the corporation. It marks the first year of our transformation program and the first full year of our strategic plan,” said Gaetsaloe

He highlighted that during the period under review the corporation managed to cut expenses, particularly those related to impairment charges and unplug revenue leakages with the disposal of some of its subsidiaries.

“While returning to profit is evidence of our efforts to run the corporation as a commercial entity, significant inroads have also been made towards making meaningful impact towards industrialisation in Botswana and thus creating employment opportunities,” he said.

The corporation’s results come on the back of its wide-reaching transformation programme which was not limited to the review of the corporation’s processes, structures and policies, but also re-structuring of its balance sheet through a divestment strategy targeting non-strategic assets and a turn around program targeting non-performing investments.

“Under the current strategic plan, we expect to double our business and make a meaningful impact towards industrialization in Botswana. Pioneering new industries, promoting exports, creating jobs are all key properties for our business and for our shareholder,” said Gaetsaloe. As part of its ambitious strategy to double BDC’s balance in five years, the corporation plans to embark on new projects that will not only boost the industrialisation agenda of the country but also diversify Botswana’s exports composition, which is currently 80 percent dominated by diamonds.

Under the restructuring exercise, BDC is divesting from approximately 12 percent of its existing portfolio; disposing of certain businesses while also investing into new ventures at the same time.

Some of the businesses that BDC has divested from during the reporting period include Metropolitan Botswana, Toro and Khawa Lodges and raising about P60 million, according to acting chief finance officer (CFO), Maranyane Makhondo. BDC has also announced divestments from Kwena Rocla, Asphalt Botswana, whilst a process to liquidate its 100 percent owned subsidiary, Talana Farms has begun.

Industries targeted under the strategy include large scale investments of not less that P30 million in sectors such as energy, manufacturing, agriculture and other infrastructure projects.  

He said the corporation’s mandate to invest outside Botswana opens new and exciting possibilities. “We are seeking innovative and commercially viable ventures both inside and beyond Botswana.  The success of our economy will depend on our ability to not only drive meaningful exports but also invest outside,” said Gaetsaloe.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

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.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

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.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020

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.

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