Letlole investors to vote on Kenya deal
Pauline Dikuelo | Monday May 30, 2022 06:00
Ahead of the meeting, LLR directors have recommended that investors accept the deal, under which the property group will have an initial 30% equity stake in Orbit Africa Logistics (OAL). LLR has the option to increase its investment to 50% of Orbit Africa Logistics for a further $7.6 million (P91.4 million). LLR has already paid an amount of $300,000 as a fully refundable deposit to OAL to secure its role as a co-investor in OAL.
“The directors of LLR are of the opinion that the terms and conditions of the acquisition are fair and reasonable and will be to the long-term benefit of LLR and its unitholders,” reads a statement by directors accompanying a circular released to the market this week. “Accordingly, the directors recommend that the unitholders vote in favour of the ordinary resolutions necessary to approve and implement the acquisition.”
According to the property group, the first tranche of $7.2 million shall be funded through a loan facility obtained from First National Bank of Botswana Limited, while the second tranche of $7.6 million shall be raised by LLR before December 31.
The co-investment is being done alongside a wholly-owned subsidiary of London-listed Grit Real Estate Investment Group (Grit) one of the largest property investors on the African continent and includes the International Finance Corporation (IFC), the investment arm of the World Bank that is a debt investor in the Orbit facility for a total of $25 million.
LLR CEO, Kamogelo Mowaneng, said the co-investment is the group’s first regional transaction which delivers on the group’s growth strategy of expanding into Africa.
“Post the transaction, approximately six percent of our portfolio will be outside of Botswana,” she said. “The transaction will see us earn US dollar revenue from one of the leading and well-established manufacturers in Kenya, a country widely regarded as the gateway to East Africa.”
Letlole’s share of profits from associates are anticipated to increase by 14% post-transaction when compared to the pre-transaction forecast of P24.6 million.
The group’s current portfolio features industrial, retail, office and residential properties around Botswana valued at P1.21 billion. The portfolio is expected to grow to P1.28 billion should shareholders vote in favour of the transaction.