Thursday, December 8, 2022

Government to sell a losing position in BTCL

Botswana Government is considering extricating itself from a sunk cost trap by selling its controlling shareholding in Botswana Telecommunications Corporation Limited (BTCL) which has seen its stock being pummeled since listing on the Botswana Stock Exchange in 2016.

A Presidential Directive has revealed that government wants  dispose off  its 51 percent shares in BTCL. The current share price of Botswana Telecom Corporation (BTCL) is BWP 0.68. BTCL closed its last trading day (Thursday, April 14, 2022) at 0.68 BWP per share on the Botswana Stock Exchange (BSE). Botswana Telecom began the year with a share price of 0.75 BWP but has since lost 9.33% off that price valuation, ranking it 34th on the BSE in terms of year-to-date performance.

Indications are that government may not wait for  a turn around for a falling stock that is tying up money that could be put to work elsewhere, but may open up the shareholding to foreigners to boost the performance of its shares.

According to a recent confidential presidential directive approved on the 27th January 2022, government has set a six months timeline to have sold its entire stock in BTCL. The directive further reveals that government is considering opening up shareholding to foreigners to improve performance of shares given that backbone is secured under BOFINET. Contained in the directive is that it is given two months to determine how much government shares should be floated, a further two months to appoint a sponsoring broker and another two months to float approved shareholding to the public including non-citizens.  

According to the documents, the decision has been deferred to undertake further analysis and consultations.

BTCL  is currently the 20th most valuable stock on the BSE with a market capitalization of BWP 714 million, which makes about 0.183% of the Botswana Stock Exchange equity market.

Led by Managing Director (MD) Anthony Masunga,  BTCL for the year ended 31 March 2021 saw the implementation of a new three-year strategy, which is focused on strengthening the core business, optimizing efficiencies and return on assets, in addition to pursuing growth opportunities.

“The national lockdown placed pressure on our performance for the first half of the year, however we have since seen a decent recovery in our financial performance year on year,” reads the BTC financial statement.

For the year ended 31 March 2021, the Group has reported revenue of P1.43 billion, which is a 1percent increase when compared with the prior year. This increase in revenue was driven by the monetisation of significant investments in fixed and mobile vo­ices across most parts of the country. mobile broadband infrastructure in support of high speed internet service at homes.

Looking ahead into the new financial year, the company stated that their focus will be on streamlining efficiencies throughout the business, adding that they will continue to keep a tight rein on their costs coupled with smart capital expenditure investments. Masunga stated in the financial reports that in line with the evolution of business, one of the key focus areas will be digitalization throughout the business as well as automation of key processes. In anticipation of increased adoption by more businesses of innovative digital solutions to sustain their performance, BTC has positioned itself to be the anchor in delivering digital solutions to its customers through its wide, high speed data connectivity network, cloud-based services and superior customer service.

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