Once a giant retailer in the non-food retailer industry, 91 year old Edcon lies helplessly on the auction block akin a half-dead dinosaur as its long standing arch-rivals happily divide and devour it amongst themselves for an easy feast. A worker in an Edcon store in Botswana remains in limbo as the big guns shred the gigantic beast into pieces.
Edcon filed for business rescue plan in April after it failed to pay suppliers. It was reported that during lockdown Edcon stores lost R2 billion in sales. This week Monday The Foschini Group (TFG) released a statement confirming its latest intentions to acquire Edcon assets for a cash purchase consideration of R480 million.
While TFG is going for the lion’s share of Edcon, Jet is waiting to add it to its comprehensive portfolio of 29 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.
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.
Many observers never expected Jet to be sold for a “good deal” or “for a song.” In an interview with CNBC Africa, TFG CEO Anthony Thunstrom said they took a very good look at Jet for 5 and a half to 6 months and made in-depth due diligence before arriving at its decision of taking over Jet.
Thunstrom said they had an offer to buy Edcon for R10 billion and they found the price was not worth it and pulled out, only for TFG to be recently offered by the business rescue practitioners to buy Jet “as a standalone” for less than quarter of a billion.
Before the Jet bid last week, it was announced by Edcon Business Rescue Practitioners Retailability will buy Edgars. Retailability also owns brands such as Legit, Beaver Canoe and Style.
According to a document seen by BusinessPost, “the Edcon Business Rescue Practitioners today announced the signing of a “Heads of Agreement” to sell parts of Edgars to Retailability (Pty) Ltd.”
Retailability left its footprints in Botswana after launching Style in Botswana with 17 stores. The company operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and Eswatini.
The crumbs after the big guys have eaten
A lot of workers in Botswana working for any Edcon, Retailability or TFG related store did not seem to be far from the development in South Africa. The picture in simple logic is that Edcon which was formed just during the beginning of The Great Depression is seeing its demise with the dawn of the novel COVID-19 and its competitors are dividing it amongst themselves.
It is a classic case of ‘when two elephants fight, it is the grass that gets trampled’. When Edcon succumbs to the financial hit that comes from the invisible giant Covid-19, workers face losing their livelihoods.
The much publicized Edcon Business Rescue Plan in South Africa had the workers representative in mind, the South African Commercial, Catering and Allied Workers Union (SACCAWU).
“Both the Employee and SACCAWU representatives expressed support for the Business Rescue Plan, indicating that they choose to back the Business Rescue Plan as it will ensure the preservation of jobs…” said Edcon recently.
It was confirmed that most Edcon employees are affiliate to SACCAWU. However, Botswana Edcon workers are not unionized nor are they members of any known union.
Botswana workers may be facing a huge task of putting their livelihoods in the hands of a multination which does not include the local employees on its high level decision making, this has left some observers worried.
UNI Global Union, a global union federation for skills and services, gathering national and regional trade unions’ regional affiliate UNI Africa, is involved in making sure Edcon as a giant employer or multinational preserves job security. UNI Global Union represents more than 20 million workers from over 150 different countries in the fastest growing sectors in the world – skills and service.
UNI Africa Sector and Project Coordinator, Lebogang Keabetswe said they are not turning a blind eye to the lack of consultation between an employer and an employee with regards to decisions taken in multinationals. She told BusinessPost in an interview that their part in un-unionized member like those of Edcon Botswana, the offer solidarity especially through their affiliates or federations who are mostly stakeholders.
She is aware that Edcon Botswana may be faced by a powerful multinational, but workers’ strength is always in numbers, she said. Keabetswe also wishes Edcon Botswana could have been unionized and hopes Edcon Business Rescue Plan does everything in good faith when Edgars and Jet are sold.
“I think from our end we would like to see workers being involved or engaged in taking decisions that affects their lives, so they can share ideas. They should also take economic factors; value chains will be hurt if Edcon dies and youth who work there will lose jobs adding to the currently high levels of youth unemployment,” said Keabetswe in an interview.
Botswana Federation of Trade Union (BFTU) Secretary General, Thusang Butale told this publication that he does not believe Edcon will retrench Botswana employees due to the emergency powers put to avoid businesses laying off workers. He said that can only happen after October after the end of the State of Emergency.
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.