With the privatisation of the first state enterprise entering a critical phase, another enterprise could soon be drawing up its own timetable of its initial public offering (IPO).
The Botswana Telecommunications Corporation Limited’s IPO opens next month and last Monday, prospective shareholders were briefed on the process and how they should ready themselves to take advantage of this historic opportunity. Speaking at the IPO Awareness pitso (grand assembly), the Minister of Transport and Communications, Nonofo Molefi, said that the government was determined to ensure that the transition of BTCL into a fully-fledged private sector entity succeeds and that “immediately” thereafter, the National Development Bank (NDB) will follow.
“It it goes right, then we should see the success of privatisation in other state enterprises,” the minister said.
Cabinet approved the privatisation of NDB in 2011, and the process to undertake such a process is ongoing. Fifty-one percent of NDB’s shares will be retained by government and 49 percent of the shares will be issued to citizens and non-citizens in the following manner: 5 percent of the shares will be allocated to citizen employees of NDB through an Employee Share Ownership Plan and 44 percent to citizens and non-citizens, with at least 30 percent to citizens and those remaining to non-citizens.
In all likelihood, the IPO process for NDB will be similar to BTCL’s: engaging IPO Advisors; undertaking due diligence (legal, operational, human resources); auditing financial statements; undertaking financial due diligence and valuation; finalising prospectus; securing approval from the board of directors, BSE, Public Procurement and Asset Disposal Board and the Companies and Intellectual Property Authority; IPO marketing/road shows; launching IPO; offer period; issuing shares and reconciling finances; and, listing on board at BSE.
The privatisation process is being spearheaded by the Public Enterprises Evaluation and Privatisation Agency (PEEPA) whose chief mandate is to develop privatisation strategies and implementation plans for cabinet approval.
Speaking at the BTCL pitso, PEEPA’s Chief Executive Officer, Kgotla Ramaphane said that support measures required to facilitate successful privatisation include encouraging citizen participation. Through privatisation, the government hopes to strengthen the role of the private sector in the economy, reduce dependence on government welfare programmes, diversify revenue sources, encourage FDI flows and improve Botswana’s global competitiveness.