BDC divests from some of its Properties

Botswana Development Corporation Limited (BDC) divests from a number of its properties by way of a listing on the Botswana Stock Exchange (BSE) through a newly formed company, Letlole La Rona Ltd.

Botswana Development Corporation Limited (BDC) intends to divest from a number of its properties by way of a listing on the Botswana Stock Exchange (BSE) through a newly formed company, Letlole La Rona Ltd (LLR) incorporated specifically for this purpose. The Company was incorporated as a public company according to the laws of Botswana on the 8th of July 2010 under Company Number CO 2010/6316. In this way Batswana will be enabled to buy shares and participate meaningfully in the ownership of these properties. The properties which will be transferred to LLR on listing include hotel properties, warehouses, factory shells and commercial buildings.

BDC’s property divestment is another empowerment move by the Corporation, following the recent sale of BDC shares in Cresta, which enables a broader spectrum of Batswana to participate not only in ownership of the property portfolio but also in the economy. The Corporation continuously reviews its portfolio with the view to divest from its mature
Investments while seeking new investment opportunities. As the Company is a public company with a code of corporate governance and independent directors, it will be a
transparent investment vehicle with shareholders able to vote on important issues that affect them. Also, with Letlole La Rona being listed on the BSE, the investment will be liquid, and will be able to be bought and sold in a transparent market in the event that the investment is to be exited for whatever reason. This is not guaranteed and is subject to the liquidity constraints of the BSE.

The property divestment exercise has been ongoing for the past year and half.  A review of the portfolio identified those properties suitable for divestment in terms of their good tenancies, strong building fabric, prime location, potential for income growth and appropriate returns to the investor.

The properties which will be transferred to LLR include the President Hotel & Cresta Lodge in Gaborone, Thapama Hotel in Francistown, and Bosele Hotel in Selibe Phikwe, all of which are presently owned by Botswana Hotel Development Company (a 100% owned BDC subsidiary) together with some 12 warehouses and factory shells, 11 of which are in Gaborone and 1 in Francistown, all owned by the 100% owned BDC subsidiary Western Industrial Estates as well as Moedi House in Gaborone, which currently houses the head office of BDC, and the former Score Supermarket complex in Gaborone both of which are owned by Commercial Holdings, also a 100% BDC subsidiary. The Portfolio of Properties is to be professionally managed by BDC’s Property Division.

Some of these properties were built as far back as the 1980’s when there were few private property developers in the country. The main drives behind their establishment at that time were to aid development and stimulate commercial and industrial growth. BDC is satisfied that this objective has been achieved and this is therefore an opportune time to divest from these properties.

The hotel properties have recently been refurbished at a cost of some P70 Million to give them a fresher look and modern appeal. In addition, a number of the industrial properties are also currently being refurbished to the tune of P11m.