Friday, July 19, 2024

Botswana mining firms urged to embrace debt financing options

Debt financing is significantly underutilised by mining companies on the Botswana Stock Exchange (BSE), according to Kopano Bolokwe, Acting CEO of the BSE. Despite the availability of capital markets to support large mining projects, all seven mining companies listed on the BSE rely on equity financing. Bolokwe noted that debt financing, which can raise large amounts of capital in stages, has been neglected. Over the past six years, these companies have raised a total of P1.9 billion through additional equity issuances.

Equity financing, while providing necessary funds for exploration and development, dilutes existing shareholders’ interests. However, it remains a viable option for companies aiming to limit debt levels. In contrast, raising capital through debt does not require listed equity. Companies can issue bonds by submitting a listing application and a Programme Memorandum to the BSE, allowing them to raise significant amounts over time..

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