December has been a mixed bag for the Botswana Stock Exchange (BSE) as the tiny bourse was expected to close the year on a high note.
However, as the market closes for Christmas, the Herin Mendis led outfit managed to nick in one and eluded by one major Initial Public Offering (IPO) that has been the talk of town before the general elections in October.
Earlier in the week, Magnum Gas & Power Ltd joined the BSE’s Venture Capital Board as it aimed to be part of a growing list of international resources companies that have obtained a listing on the local exchange.
“The application to dual list Magnum’s ordinary securities on the BSE has been made in large part to affirm its commitment to Botswana and to the development of its wholly owned Unconventional Gas and Petroleum Projects in that country,” it said after listing on Monday.
Magnum Gas & Power owns 100 percent of Energy Botswana Pty Ltd (as a result of the aforesaid merger), which in turn holds 100 percent of two intermediary companies in Mauritius ÔÇô Gasco International Ltd and Nata Energy Mauritius Inc. Gasco International Ltd, in turn, holds 100 percent of Baobab Resources Ltd in Botswana whose main asset is Petroleum exploration licence 154/2012.
Nata Energy Mauritius Inc holds 100 percent of Nata Energy (Pty) Ltd whose main assets are prospecting licences in the Central Project area as well as prospecting licences in the Northern Project area.
On another note, the biggest listing news could have been Botswana Telecommunications Corporation Limited (BTCL) IPO that was never to be.
The IPO that follows government’s privatisation drive has been moved to the New Year as the November 7th date failed to materialise.
This week government said a number of considerations have necessitated that the IPO, which was scheduled to be opened by the end of 2014, be extended into 2015.
“It was thus always an ambitious timeline to conclude before year-end, one that all in the Project nevertheless believed was achievable,” admitted Ministry of Transport and Communications officials on Friday.
They argued that a deferred IPO opening would have the additional benefit of allowing more Batswana to continue to save to enable them to participate in what will be the most significant listing in the history of Botswana.
“Institutional investors also felt that opening over the holiday break would not allow them enough time to conduct their own internal processes (convening investment committees, seeking board approvals and so forth),” the ministry statement revealed.
“They also felt that as the BTCL IPO was a unique offering for Batswana providing them more time would help in ensuring more participated after the holiday break.”
Government has been struggling to privatise its institutions as per the World Bank’s Structural Adjustment Programme recommendations to government. Air Botswana was major state silverware that was nearly privatized until one minister raised red flag that the country will lose pride if government could sell ‘family’ silverware to another state owned company.
The 49 percent shares in BTCL are expected to be listed on the BSE with the government retaining a 51 percent majority stake. Of this 49 percent, 5 percent will be reserved for staff as part of an Employee Share Ownership Plan (ESOP).
As it stands, the BSE has nicked one and eluded by another.