Thursday, September 24, 2020

Letshego seeks P1 billion to strengthen itself across Africa

Letshego Holdings Limited, formerly known as Micro Provident, woke the markets from a silly season this week as it indicated that it intends to raise P1 billion aimed at funding its expansion plans while at the same time pointing out that its half year results would be better than expected.
The micro-lending company, which also celebrated its 10th anniversary on Friday, is expected to come to the market with a proposal for P1 billion debt instruments whose details are still being hammered by its corporate advisors.

The move announced to the press on Friday followed a thumps up approval by the special general meeting Thursday at GICC, where an overwhelming 80 percent of shareholders ÔÇô excluding the World Bank’s investment arm, the International Finance Corporation, which by its constitution does not vote ÔÇö or 122, 470,094 of the votes of ordinary shareholders , who approved the plan.

IFC, which has a strong focus in the development of Africa, holds seven percent of the shares in the company.

“We do not intend to stop at the present African countries that we are operating from. We are also looking at other African countries,” chairman of Letshego Holdings Limited, Moses Lekaukau said at a press conference Friday.

Some of the African countries which are being targeted include Ghana, Mozambique and Namibia in the short to the medium term. The Botswana IFSC accredited company is looking to be one of the country’s greatest exports as it already has presence in Swaziland, Tanzania, Uganda and ZambiaÔÇöapart from Botswana.

Letshego is also digesting plans to spread some of its product outside money lending, such as in Legal Guard and the yet to be introduced banc assuranceÔÇöbut its details are still sketchy as they yet to sign a deal with technical partners.
“We want to get into all these countries to create wealth for our shareholders,” the company’s Chief Financial Officer, Calm Petterson said.

Regarding the debt instrument, he said the details would be announced in due course but the whole plan is that if the deal is approved by the Botswana Stock Exchange, it would be divided into trenches.
Further, Petterson said another plan is to come up with a right issue in a bid to support the company’s equity trading exercise and broaden the base of shareholders.

“This is expected to earn us a dollar-based revenue and will be brought to Botswana shareholders,” Lekaukau said.

The Group Managing Director, Jan Claassen, was optimistic that they would be able to raise the required amount indicating that they have been talking to various parties “who have expressed interest in debt instrument”.

Letshego is an impressive company with a loan book of over P1 billion. And, on historical basis, its default rate is less than two percent. It also contributes to the corporate social investment.

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