Letshego Holdings Limited (LHL), Botswana’s flagship in the financial services sector has been urged to repel the Stellenbosch sponsored bid aimed at assisting Bayport to acquire it.
Christopher Hartland-Peel, of Hartland -Peel Africa Equity Markets, in Essex in United Kingdom pointed out that Sanlam is using Bayport- a laity in the financial service market—and agitated LHL to stage a take-over of Bayport to bolster its image across the world.
“The conclusion of this report is that Bayport offers greater downside and increased risk for Letshego Shareholders.
“Letshego could turn the tables and bid for Bayport, close their marginal Latin American operations and merge their stronger African business,” Hartland -Peel said in his report.
Letshego is 35 percent held by Botswana Public Officers Pensions Funds—the grey hair fund—and has injected P 7.5 billion into Botswana Insurance Fund Management (BIFM), an off-shoot of Botswana Insurance Holdings Limited (BIHL), which is 58 percent held by Sanlam.
“Letshego has many things Bayport wants and Bayport, has many things that Letshego does not want,” Hartland said in his latest company report following the famous one titled “BIHL: Letshego is the jewel in in BIHL’s Crown”.
Letshego’s ace chief executive officer Aupa Monyatsi burning mid-night oil to try to build a proper team following theb company’s bad full year financials results to December 2022, which dipped 30 percent to P 801 million.
He has roped-in former managing director of Access Bank Botswana, Kgotso Bannalothe to oversee Botswana, Eswatini and Lesotho operations, while, Fergus Ferguson — who was the Earl of these areas- is headed to troubled operations of East and West Africa.
Letshego has a presence in 11 countries namely:- Botswana, Eswatini, Lesotho, Namibia, Mozambique, Uganda, Tanzania, Kenya, Rwanda, Nigeria and.Ghana , Kenya, Tanzania and Uganda are the trouble-spots that dragged down the company results.
Letshego is into micro financing, banking, deposit taking. It aims to get into insurance, payments, savings and housing products and to target non-government employees and SMME. It has acquired banking and deposit taking licences in Ghana, Mozambique Rwanda, Tanzania, Nigeria and Namibia.
In 2021, Letshego’s earnings were four times better than those of Bayport and its Return On Earnings were twice bigger than those of Bayport. At the same time, Letshego had an effective tax rate of 36 percent against 63 percent o Bayport.
“Letshego is better managed, uses its assets more efficiently and at a lower cost. Earnings are less volatile that those o Bayport,” he said.
“According to media reports and court documents, Sanlam of South Africa has 58 percent shareholding.. It is proposing that BIHL dispose of its 28 percent in its shareholding in Letshego in to Bayport Management of Mauritius ( same line of business as Letshego) and then acquire more shareholders through a tender offer,” he said in his report.
