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BSE places Shumba securities on default board

Upcoming energy developer, Shumba Energy this week was dealt with heavy blow, as the local bourse Botswana Stock Exchange (BSE) placed its equity securities on defaults board with immediate effect citing non-compliance. 

According to BSE Chief Executive Officer (CEO) Thapelo Tsheole, on the 26 August 2021, Shumba Energy announced that all the company’s Non-Executive directors have voluntarily stepped down in order to facilitate the re-organisation of the company and re-domicile transaction of Shumba Energy from Mauritius to Botswana.

The BSE chief said one of the reasons why Shumba Energy securities was placed on the default board was because Shumba Energy management failed to take a consultative approach with the BSE and Shareholders in implementation of the transaction but rather they have been hasty, opaque and unreactive to the regulatory demands.

Tsheole further noted that the upcoming energy developer has to date not reversed the resignation of the non-executive directors in order to regularize their non-compliance status and thus currently the company operates with two executive directors being the Managing Director (Mashale Phumaphi) and the Finance director (Thapelo Mokhathi).

“The current board composition is therefore not free from conflicts of interest, and it has no appropriate balance of power and authority. In terms of principle 2.18 of the King III code on Corporate Governance, “the board should comprise a balance of power, with a majority of non-executive directors,” said Tsheole.

“The majority of non-executive director should be independent. Therefore, Shumba Energy is not compliant with the provision of the requirements on corporate Governance.” Tsheole also cautioned that the current board composition has the potential to prejudice the shareholders of the company, especially in the light of the proposed restructuring given the current lack of balance of power and authority of the board, as the decisions taken may not be in the interest of all shareholders.

“Placing Shumba Energy securities on the Default board will highlight to investors the non-compliance of the company and also give them an opportunity to appropriately assess the riskiness of the company as an investment given the current corporate governance set up and also the increased potential for information asymmetry due to lack of checks and balances,” he said.

Meanwhile, the aspirant energy developer last week revealed that they have secured commitments of $950,000 from international investors to develop an $80 million (800 millions) for the 100 MW solar project as part of the company’s plan to shift towards renewable energy. According to Shumba Managing Director, Phumaphi, the Tati’s 100 MW Solar project will be the country’s largest upon completion.

Commenting on the securing of the funding, Phumaphi said: “We believe that fossil fueled projects will continue to be necessary for a transitional period. However, environmentally sustainable generation will continue to develop at significantly greater rates and is expected to become the main source of energy going into the future. The funding will support our efforts to promote sustainable and clean energy for regional consumption in the best interests of the planet and future generations.”

Besides, Phumaphi also told local media that the company expected to finalise funding of the P800 million by the second quarter of next year, leveraging on the renewed global interest in renewables following commitments made recently at the Glasgow climate conference.

The equity funding secured recently will go directly into Shumba Renewables Pty Ltd, a wholly-owned subsidiary the company has set up to guide its new focus into cleaner energy. Shumba Energy holds 4.6 billion tonnes of measured and indicated coal resources across licences in Botswana, but has recently shifted its focus to renewable energy.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

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.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

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.

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Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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