Mauritian real estate group, Grit Real Estate has snapped up 23.7% of the Botswana Development Corporation’s (BDC) shares in Letlole la Rona (LLR), in a deal worth US$13.8 million (P150.3 million).
The deal means Grit now holds 30% equity in Letlole, up from 6.25 percent, while the BDC is down to 42% from 65.8%.
The purchase consideration for the deal is not cash, but rather the issuance of new Grit shares to the BDC at US$1.40 per share. The deal could give the BDC what is possibly its first offshore equity, a strategic direction the Corporation has been pushing for sometime.
On Wednesday, Grit CEO, Bronwyn Corbett explained that the acquisition would expand the pan-African group’s property portfolio and create further value for shareholders in both Grit and LLR.
“We are pleased to announce this further increase of our stake in LLR, which represents an opportunity to utilise LLR’s local expertise and to gain exposure to exciting asset management opportunities whilst significantly increasing our presence in Botswana, a key market for Grit’s future growth,” she said.
Corbett further noted that Botswana, as an investment jurisdiction, satisfies Grit’s key investment criteria given its economic growth, politically sound environment, investment grade rating, availability of debt
Grit already has property portfolio valued at about US$730 million (P7.9 billion) in seven African countries including Botswana. The majority of the group’s properties are in the retail sector as well as commercial offices.
Letlole, meanwhile, boasts 20 properties last valued at about P774 million and mainly in the industrial and retail sectors. Letlole CEO, Chikuni Shenjere-Mutiswa said the deal was in line with delivering strong portfolio growth for shareholders. “I’m proud of what LLR has achieved in the eight years since the company listed.
“We are very excited about the prospects for the business through our collaboration with Grit as LLR becomes Grit’s partner of choice for real estate in Botswana and the wider region, delivering strong portfolio growth, as well as a sustainable income stream for shareholders,” he said.
LLR recently disposed of all its hospitality assets for a total consideration of P235 million, which it plans to deploy in a “pipeline of yield-enhancing investment opportunities”.