The Botswana Telecommunication Corporation Limited (BTCL) has announced that its share sale prospectus will be released mid-2015 ahead of its initial public offering (IPO).
This was confirmed by the BTCL Managing Director Paul Taylor, in an interview with Sunday Standard on Friday. Taylor said the prospectus, once available, will signal the BTCL IPO and its listing on the Botswana Stock Exchange (BSE), which was postponed numerous times last year.
“The team is continuing to work towards a successful listing for this citizen owned company,” said Taylor.
He further said the BTCL prospectus will be further based on the corporation’s April 2014/March 2015 financial results, which will inform prospective investors about the corporation’s liquidity and financial potential. He revealed that the listing team is busy working on underwriting arrangements and wrapping up a few other less significant tasks.
“We will continue engagements with all stakeholders to inform them of our progress,” said Taylor.
However, the BTCL CEO was reluctant to share insight on the prospective share price during the IPO, saying everyone must wait for the release of the prospectus.
“This ensures that all interested parties receive the information at the same time as per the BSE requirements.”
The share sale prospectus will typically include background information about the company, company strategy as well as information on company directors and senior officers. The prospectus will also provide information on how many shares are planned to be offered, the price of the shares and the process that will be followed to acquire them.
Why the delays?
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. Asked to explain the numerous postponements, Taylor said the process was very complex as there was a need to finalize accounts and separate assets. He however pointed out that the decision to defer the listing was taken early in December 2014 and only postponed to 2015.
“Most tasks are close to completion. We felt it was better to defer and allow potential investors to ready themselves for the listing. Deferral allows citizens to continue saving for this most significant listing in the country’s history,” said Taylor.
Doubts about BTCL profitability
The BTCL shares will be available for only citizens and citizens owned companies. Pundits have cast aspersions on the viability of BTCL after its privatization and separation from Botswana Fibre Networks (BoFiNet), saying the corporation remained with less lucrative infrastructure and businesses that raised doubt about its profitability going forward.
In response, Taylor said the size and shape of the company has changed as a result of separation and creation of BoFiNet. He added that in the short term BTCL will focus on defending its traditional business while growing mobile and broadband services.
“We will primarily focus on quality in the short term. In the medium term, we will leverage to a greater extent our unique position as a provider of fixed, mobile and converged services. There is no doubt that BTCL will be competitive,” said Taylor.
Collins Newman and Deloitte Consortium (CND) have been appointed as the transaction advisors and they will work in conjunction with the Public Enterprise Evaluation and Privatization Agency (PEEPA), who are the privatization agency of government. BTCL have all along been assisted by Monthe Marumo and Investec.
Taylor also revealed that BTCL plans to invest 9million Euro in mobile network enhancements on 38 new 3G Sites as well as core network upgrades.
“There are significant other investments in replacing obsolescence and enhancing capability. For example, we have deployed ethernet over copper to replace the old technology but with wider than previous deployment. We have also upgraded our billing systems. We are maintaining focus on our strategy as a fixed, mobile and converged company with strong emphasis on customers and service delivery,” he said.