Thursday, May 23, 2024

BTCL should be typical and postpone its IPO again in December

It is true that the over 30 year’s old parastatal, BTCL has done it again. Yes, after promising to go public by August and then later pushing it to November, it has yet again postponed its IPO to an unspecified date. The only commitment the company and its associates, Ministry of Communications and PEEPA have made is that the company will go public before December 31st.

Yes, the BTCL has chosen the most inconvenient time when the most targeted and prospective investors being Batswana will be on festive holidays. That is the time that the company intends to go public.

To date, the company is yet to release its prospectus. To apprise those who might be challenged by the financial language, a prospectus is a formal disclosure document that contains all the relevant facts that guide an investor to make an informed choice on the purchase of shares. It includes application forms for the shares.

To some of our readers, this commentary could likely sound like the one we ran about two weeks back. As we all might be aware, the privitisation of BTCL and subsequent listing on the local bourse has long been overdue. Sometime in February this year, the Public Enterprises Evaluation and Privatization Agency (PEEPA) which is tasked with the role of turning state companies into private entities went on record to say the opening of the BTCL IPO will be in August.

Just like we said several weeks back, to date no one, and by no one we mean amongst the Batswana who are anticipating purchasing BTCL shares and are aware of the value of the company that they are likely to own. Neither BTCL nor PEEPA is ready to state how much BTCL could be valued at.

This is despite the fact that the Ministry of Communications admits that several citizen stakeholders as well as various institutional investors have been engaged through various fora including diPitso in Gaborone and Francistown and they have expressed phenomenal interest to participate in the process of buying BTCL shares.

In a hopeless press statement released this past week, the government states that two key issues have been raised repeatedly at their interaction fora which need to be addressed. “Firstly, the audiences, especially amongst the individual citizens, indicated that they had limited understanding of an IPO as well as how one can participate and benefit from it.

Secondly, they requested for ample time to organise funding that they would use to purchase the shares with, in essence, that the current IPO date was too close. To address these issues, we will extend the awareness campaign being undertaken for this IPO to ensure that a wide reaching and more informative education programme is delivered.”

If indeed the government means what it says in the aforementioned statement then we argue it to postpone the whole process to next year. Yes, do not list BTCL this December if you really want to sell to indigenous and ordinary Batswana. There is no need to rush. If indeed the government is yet to recover from the 2008 global recession, why does the same government which employs a sizeable number of Batswana think that its employees have money to invest in capital markets? Mind you, these are the same employees who have gone for close to five years without proper salary increase.

The fact of the matter is that at this time of the year, most ordinary Batswana, whom we believe deserve BTCL shares, are looking forward to spending the Christmas holidays with their families. Their budgets are as such geared towards Christmas spending, nothing else.

Although it true that investors will never be ready for an IPO, particularly those who are not familiar with capital markets like most of our people, the Bottom-line remains that the government should commit to initiatives intended at enhancing other on-going activities that are geared towards ensuring that as many citizens as possible prepare and participate in this momentous opportunity. We therefore suggest a postponement of the IPO to 2015, as an added measure to ensure that the targeted investors are atleast at a financial level that would allow them to participate in this historic undertaking. After all there is no rush as shown by the number of times that the process has been postponed.


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