Cresta Marakanelo Limited is to embark on share offer tomorrow (Monday) aimed at addressing the pent-up citizen empowerment appetite as its main shareholder, Botswana Development Corporation (BDC), off-loads some of its shares to the market.
With the offer that will be open Monday ahead of the actual listing mid-next month, the giant hotel group intends to list 62.9 million shares at P 1.45 thebe a piece ÔÇô being the stake held by BDC ÔÇô to try to support the citizen empowerment initiatives.
The move is expected to leave BDC with almost 26 percent shares in the company, while TA Botswana, the strategic partner, at 40 percent while the rest is in the hands of other shareholders participating through the Botswana Stock Exchange (BSE).
The new development will in total see 62.9 million shares on offer through the BSE.
And out of that 18.5 million shares will go to the market through private placement, 40.7 million shares will be sold through public offer while the remaining 3.7 million shares or two percent of the company will be bought by the company on behalf of its employees.
The share offer that opens Monday will run until June 17, when the company will be officially listing on the BSEÔÇöa move seen by many as implementation of the strategic review initiated by the current finance and development planning minister, Kenneth Matambo, while he was still the head of government’s private investment arm.
The strategic plan, among other things, would like to see BDC reducing its involvement in projects that are established such as Cresta Marakanelo and its property wing as it plans to drive them to the BSE to ensure that as many Batswana take stake either through insurance, pension funds or they do directly invest.
The move was embolden by its shareholders as they injected some corporate life into the entity last year when they passed a resolution converting it into a public company while at the same time ensuring that it conforms to the listing requirement of the BSE.
But the works have been behind the scenes until Wednesday when the BSE approved its intended listing documents following months on end when it was sent back and forth by BSE listing committee.
Cresta Marakanelo was founded in 1974 and was then 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 recognised 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.
Hotels which have the same offering are grouped into the same gateway. The majority of Cresta’s customers are business travelers, but some locations and services offered also cater for leisure travelers,” the company said.
The company said its unique positioning on the Botswana market puts it in a strategic place to fare well in terms of business performance and has enabled it to have “a large number of repeat guests”, especially in cities such as Gaborone with a large number of business travellers.
“Cresta has traditionally had a large number of guests staying at hotels for business for government of Botswana. This number is expected to decrease as government has issued a directive to local councils to reduce their expenditure by 25 percent, including their travel costs, but Cresta believes the impact to revenue will not be significant as the hotels usually frequented by government travelers currently have the high level of occupancy. The company expects the occupancy rate to remain between 70 to 75 percent over the long term,” it added.
Cresta Marakanelo will be the third tourism outfit to list on BSE following Chobe Holdings and Wilderness Safaris last month.
Wilderness Safaris has a secondary listing on the Johannesburg Securities Exchange.