Grit to exit Letlole la Rona

Mbongeni Mguni | Monday March 13, 2023 06:00

Grit, a Mauritius-domiciled entity with roots in London, at one point was the second largest shareholder in LLR with 30% equity, second only to the founding shareholder, the Botswana Development Corporation (BDC) with 40%. However, the real estate group began offloading its shares in December after a heated Annual General Meeting where investors clashed over strategic control of the local property firm.

Some shareholders, BusinessWeek is informed, felt that Grit was exerting too much control over LLR’s 'Go-To-Africa' strategy, the local property group’s much-vaunted push for continental expansion.

In a statement this week, however, Grit CEO, Bronwyn Knight did not address allegations of shareholder squabbles, but rather said the shedding of shares in LLR was part of a revised growth strategy where equity in the local group would be redeployed into “further resilient African impact development assets”.

“Since the original investment in 2019 and supported by Grit’s direct real estate and governance involvement alongside fellow large investors, LLR has delivered substantial value to all shareholders,” Knight said. “While Grit remains highly committed to investment in Botswana and the broader region, this recycled capital will now be redeployed in support of Grit’s ongoing transition towards Africa impact-focused assets, which are expected to deliver near and longer-term value creation and growth opportunities in net asset value and income, for the benefit of all our stakeholders, including the people of Africa.”

Tuesday’s sale of 6.4 million shares netted Grit P22.5 million, bringing the total the group has cashed out from LLR in recent months to P135.4 million.

“Funds received from the transaction are expected to be applied towards Grit debt reduction, replenishment of liquidity reserves over the short term, and redeployment into acquisitions and future Group projects over the medium term,” Knight said.

LLR directors on Wednesday afternoon said Grit had announced its intention to sell all its holdings in the property group.

"The exit process will take place in an orderly manner so as to maintain stability of the company's share price," the directors said.

In December, Grit tried unsuccessfully to adjourn LLR’s Annual General Meeting (AGM) citing “an urgent, significant and material matter” requiring the board’s attention before the AGM.

At the AGM, the re-election of one of Grit’s directors on the Letlole board was rejected by shareholders, although the pan-African group still has three out of five seats after the meeting.

LLR CEO, Kamogelo Mowaneng, recently told Mmegi that the local property group was not 'tied' to Grit Services and can use other partnerships to push into Africa.

“When it comes into our Africa expansion strategy, we can use other partnerships which we feel are valuable,” she said. “We continue to explore pipeline opportunities locally and regionally in line with our Go-To-Africa strategy and our interest remains on value-accretive investments. “We normally identify strong partners who know those markets well.”

LLR was established in 2011 as part of a divestment attempt by the BDC, via an Initial Public Offer and subsequent listing on the BSE.