The recent announcement by Cresta Company to dissolve the Cresta Marakanelo Limited Employee Share Trust has been hailed as a good move as it will boost the company’s performance.
Cresta has proposed to buy back the two per cent (2%) (3 700 000) shares owned by the Cresta Marakanelo Employee Share Trust, Karabo Tladi an investment analyst with Blackthread Capital said “it’s a good move by Cresta because the cashflow from dividends they we getting from the Employee Share Trust was not adequate enough for them to pay for the principal amount and interest payments on the loan.”
Cresta got a BWP 5.3 million loan in 2010 from the parent company to buy the shares for Cresta Marakenelo Employee Share Trust. However the shares were not growing as Cresta is still trading below its IPO at the moment. “Their low dividend payout ratio is also one of the reasons they cannot keep up with principal and interest payments,” said Tladi.
He added that the move was long overdue because Cresta has not been doing well in the market in terms of returns to shareholders. The company listed at 145 thebe in 2011 and its now trading below 100 thebe currently in the market.
“The fact that the share price of Cresta return negatively to shareholders since listing is also one of the reasons why they are buying back the shares from Cresta Marakanelo Employee Share Trusts. If the share we growing they could maybe sell some of the shares to pay for the loan,” he said.
The move by Cresta to buy back the shares has also received criticism as conflicting the government citizen empowerment drive.
Tladi though he conceded to this fact he highlighted that from the company’s perspective, they simply could not afford it. “They shouldn’t have gotten a loan to buy the shares for the Employees Share Trust rather used their available cash resources, never borrow to invest it does not make economic sense,” he said.
Tladi added that if Cresta can recover the amount of the loan this could improve the company’s cashflow going forward”. He noted that though Cresta is a good business and has potential to grow the reason why Cresta is trading below its IPO price because they listed at a very high price. “I think they got the valuations wrong from the start,” he said.
Cresta is strong brand locally and they recently signed lease agreement with company that is going to develop a hotel in Maun. They have strong presence in major towns and villages around the country. They are expanding into Zambia, which good market for future growth.
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.