BY VICTOR BAATWENG
The stock of furniture store ÔÇô FurnMart Limited, stopped trading at the Botswana Stock Exchange Limited (BSEL) this week, a capital market cautionary statement shows.
Confirming the delisting this week, the company also said that, “share certificates will be mailed to the remaining dematerialised shareholders by 22 Friday 2019”. Initially the company was to delist its shares from BSEL’s domestic board on Tuesday ÔÇô 29th January 2019 but said around that time that atleast 8 percent of its shareholders who responded rejected the offer to buy back the shares by the company.
In November 2018 the local furniture retailer ÔÇô FurnMart listed amongst others – diminished future growth, zero appetite for capital and new listing rules ÔÇô as some of the reasons to delist from BSEL.
“The credit furniture retail business has been in turmoil over the past decade with well-known regional competitors either closing down or reducing the number of stores. The business model has been under severe pressure in challenging regulatory environments and attempts by FurnMart to diversify both regionally and in terms of the business model have not yielded the growth opportunities that we have been looking for,” Tobias Mynhardt, the company deputy chairman, said in November 2018.
After listing at BSEL for over 20 years, FurnMart says it is troubled by the decline of its share value, losing about 76 percent of its peak market value between august 2014 and October 2018. The company also took issue with the illiquidity of the stock ÔÇô only 3.04 percent of all shares was traded in the past six years, and only 0.02 percent from the start of the year up to now.
“We listed on the BSE to raise capital for a regional thrust in key markets being Botswana, Namibia and South Africa. The strategic intent was to expand from home markets to the rest of Africa. Over the course of the last six years our stock has been illiquid in the market with trade of our shares being less than 3 percent of those in issue. This to some extent has inhibited our market capitalization,” said Mynhardt in November 2018.