Cresta Marakanelo Limited, the hotel and tourism group, set the citizen economic empowerment pace this week as an overwhelming number of retail subscribers bought into the company during its Initial Public Offer (IPO) that closed on Monday.
In what marked one of the most successful IPOs in the recent history, the company was 93.88 percent subscribed compared with the average figure of 60 percent.
What was more encouraging was the participation of the retail investors which shot to over 3,400 subscribers, making it an outstanding company with the biggest individual participation on the BSE.
“What is so interesting is that a lot of individuals expressed interest in the company during the IPO which is what it (BDC) wanted to achieve,” Geoffrey Bakwena, Head of Stockbrokers Botswana, the sponsoring broker, said.
The Botswana Development Corporation (BDC) embarked on the listing exercise as part of its long term aim of empowering citizens through its disinvestment in entities that it owns.
The company issued an IPO for 62.9 million shares at P 1.45 thebe–a piece that were held by BDC– to try to support the citizen empowerment initiatives.
However, 56.7 million were bought through private placement and IPO.
That means BDC will retain the 2.4 million shares that were not taken up at the close of business on Monday, leaving it with 27.35 percent stake in the company compared with the 26 percent it had envisaged at the time of issuing the IPO.
That leaves TA BotswanaÔÇöthe strategic partnerÔÇöat 40 percent, employees with two percent, institutions at 10 percent while individuals control 20.65 percent through the Botswana Stock Exchange.
The move is part of the BDC’s strategic plan, among other things, would like to see the giant government investment arm reducing its involvement in projects that are established, such as Cresta Marakanelo and its property wing as it is planning to drive them to the BSE to ensure that as many Batswana take stake either through insurance, pension funds or they do directly invest.
Cresta Marakanelo was founded in 1974 and then was known as BDC Hotel Management; it is currently one of the leading hotel brands in the country and operates eight hotels.
The hotels are: Cresta Lodge, President Hotel, Botsalo Hotel, Bosele Hotel, Marang Gardens and Hotel, President Hotel, Riley’s Hotel , and Cresta Mowana Safari Lodge.
In total, the company has 724 beds in Botswana.
“Over the last eleven years, the company has expanded and is now recognized as a leading brand in Botswana. Last year Cresta underwent a re-branding exercise whereby hotels within the portfolio are categorised into four separate gateways, which are defined by the products offering of each Cresta hotel,” the company said.
Cresta Marakanelo will be the third tourism outfit to list on BSE, following Chobe Holdings and Wilderness Safaris.
Wilderness Safaris has a secondary listing on the Johannesburg Securities Exchange.
The company is scheduled to formally list on BSE main board on June 28.