Thursday, October 28, 2021

Inside why Wilderness withdrew its Air Botswana bid

Fresh details have emerged suggesting that Wilderness Holdings withdrew its bid for Air Botswana after it was discovered that it had not complied with the requirements of a listed company.

Wilderness Holdings’ primary listing is on the Botswana Stock Exchange (BSE) and its secondary listing is on the Johannesburg Stock Exchange (JSE).  

Sunday Standard has also turned up information showing that Wilderness Holdings also withdrew its Expression of Interest (EOI) on Friday following a public outcry that it had been handpicked to partner with Air Botswana and to be a majority shareholding through a Presidential Directive.  

Scores of Batswana took to social media last Thursday and Friday to express displeasure at Presidential Directive CAB 12(A) 2017 instructing Cabinet that Air Botswana should partner with Wilderness Holdings.

The company posted a statement on the BSE website withdrawing its EOI because the public backlash was a threat to its share price trading at BSE domestic main board.

“When the company showed interest in bidding for Air Botswana, it was supposed to have issued a cautionary statement to the market and to shareholders for their approval looking at the size of the transaction,” a source said.  

It is understood that most of the shareholders were opposed to the acquisition of the ailing Air Botswana which has been struggling with profitability.

Sunday Standard has also learnt that the decision by Wilderness Holding to withdraw from the bid had been developing behind the scenes.  

When the Permanent Secretary in the Ministry of Transport and Communications, Kabelo Ebineng appeared before the Public Accounts Committee (PAC) and confirmed that Wilderness and ComAir had been shortlisted, the decision by Wilderness Holdings to withdraw from the bid was already in motion, an insider revealed.

It is understood that the information contained in Ebineng’s executive summary report which was presented before PAC relating to Air Botswana partnering with Wilderness Holdings through a Presidential Directive should have been scrapped off because the company had already decided to withdraw from the bid.

“This has been developing for months (Wilderness Holdings withdrawal). You have to also note that Botswana Public Officers Pension Fund (BPOPF) is considering funding Air Botswana because the Ministry had made an investment case following Wilderness Holdings’ withdrawal,” said another source close to the botched transaction.

There are even claims that the Ministry of Transport and Communications believes that should it seal the deal with BPOPF, it could turn around Air Botswana’s fortunes through restructuring.

“As I see it, privatization of Air Botswana will be on hold for a while yet again,” the source said.  

President Ian Khama this week, through his Private Secretary, Gobe Pitso, would not respond to Sunday Standard queries and referred this publication to the Ministry of Transport and Communications.

Wilderness Holdings, which owns Wilderness Safaris has interests in the wildlife rich Okavango Delta and Chobe Districts. Khama has interests in Linyanti Investment, a subsidiary of Wilderness Safaris.

This publication sought to establish among others if the President had declared his interests when he issued the directive that Air Botswana should partner with Wilderness Holdings as majority shareholder; to whom did President Khama declare his interests and whether he was not conflicted since he has interests in Wilderness Holdings.

Contacted for a comment, Ebineng said immediate response from his Ministry was not available.

“A position has been adopted that we will issue a response next week. The reason is that our office has been inundated with queries from various media house relating to the same issue,” he said.

Ebineng’s executive summary report that was presented before PAC states that “In this instance Cabinet has, per Presidential Directive instructed that Air Botswana be turned into a company with private shareholding, and to partner with Wilderness Holdings who will have a majority shareholding, subject to negotiations and applicable statutory requirements.”

In another curious development, when contacted by Sunday Standard on Thursday, Secretary to the Cabinet and Permanent Secretary to the President, Carter Morupisi denied the existence of the Presidential Directive CAB 12(A)2017 instructing   Air Botswana to partner with Wilderness Holdings with a majority shareholding.

Asked to comment on claims that they were forced to withdraw due to a public backlash, Commercial Director and Chief Sustainability Officer at Wilderness Holdings Limited, Derek de la Harpe said “although we are aware there has been much conversation on different platforms, sadly there has also been a lot of misinformation in those spaces.”

He added that “We made a business decision based on the facts that were before us. We feel it is in our best interests for us not to be involved and that Air Botswana will find a solution with another partner. 

Harpe said “We have since received feedback from Government about their interest in us partnering with them to find a solution. This was a major consideration for us, but we took the decision not to participate further in the process. 

Regarding the Presidential Directive, he said “this is an internal matter to Government which we are not aware of. From what we know, the list of companies that also responded to the EoI includes a number of competent organisations that would be able to provide Government with a suitable solution.  We will as always provide our support where we believe we can make a valuable contribution.”

On allegations that they did not follow procedure as a listed company before making the bid, Harpe said “this is simply not true.  In this instance, we are talking about a non-binding expression of interest in an as-yet undefined transaction.  There is no requirement for any disclosure in such circumstances.  We regularly meet and engage with both with the BSE and the JSE (through our sponsors), to ensure that we comply with all requirements.”

He added that “You will also note that the statement withdrawing our interest was shared, in accordance with the relevant requirements, through the official news services of both the BSE and the JSE, as would be our normal practice on any matter. We are grateful that both exchanges continue to regulate and guide as per their mandate, ensuring all listed entities operate in accordance with the requirements.”

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