Tuesday, December 7, 2021

BTCL Managing Director wants IPO postponed again

The Managing Director of the Botswana Telecommunications Limited (BTCL), Paul Taylor has cautioned against listing the shares of the telecommunications giant, BTCL at the Botswana Stock Exchange (BSE) this festive season.

Taylor said Friday when appearing before the parliamentary statutory bodies committee that as a company, BTCL needs more time before it could open up to the public.

The British, who joined BTCL more than three years ago, told members of parliament that the opening of the BTCL Initial Public Offering (IPO) by December this year would be “risky and disastrous”.

Taylor pleaded with the members of Parliament Statutory Committee to put a request in Parliament in the next session to consider extending the BTCL IPO listing from the targeted December 2015 to atleast April 2016.

“The reasonable time for us would be April 2016, but we cautiously suggest the date given the fact there are a number of other stakeholders involved in the project. There is need to consult with PEEPA which has been given the mandate to privatise government entities,” Taylor said Friday.

PEEPA is responsible for advising Government on privatisation strategies as well as implementation of privatisation, which includes commercialisation, restructuring, outsourcing and divesture interventions for the effectiveness and efficiency of PEs and Ministries as well as promoting good corporate governance.

In his response, the Committee Chairman, Guma Moyo said that as legislatures they are committed to work with all the parties involved in the project to ensure that it finally comes to fruition.

The BTCL listing was postponed on numerous occasions last year, sparking uproar and fears within the business community that the continued postponements could dampen the mood among prospective investors.

In December 2014, government said the listing had been postponed to sometime this year, adding that the initial deadline had always been ambitious considering the magnanimity of the exercise.

“A deferred IPO would have the additional benefit of allowing more Batswana to participate. Institutional investors also felt that opening over the holiday break would not allow them enough time to conduct their own internal processes,” said the Ministry of Transport and Communications (MTC) at the time.

Government also revealed that it was still concluding a number of material steps in the listing, including securing the necessary underwriting arrangements. Because BTCL shares would be reserved for citizen investors, government was compelled to serve as an underwriter for the IPO. Because they are foreign owned, local commercial banks were barred from underwriting the listing, amid fears that BTCL would fall into foreign hands should the listing be undersubscribed. At the same time, indigenous financial institutions like Botswana Savings Bank (BSB), Botswana Building Society (BBS), as well as local insurance companies were deemed as lacking the requisite skills to undertake such a complex process.

Despite these explanations, industry players have cast aspersions on the success of the listing, saying there are serious doubts among investors on the profitability of BTCL going-forward. Potential investors are doubtful that BTCL will replicate the stellar results of yester years.

Since early last year, citizen investors have been waiting with bated breath to claim a stake in BTCL. The Corporation was poised to become Botswana’s first ever public enterprise to be listed on the local bourse. 49 percent of BTCL shares would be up for grabs by strictly citizens and citizen-owned companies while five percent was to be reserved for BTCL employees. Government would retain 51 percent shareholding in BTC.

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