CA conditionally Okays BDC, Nampak deal
Staff Writer | Friday January 13, 2017 13:50
While the watchdog says it does not see any competition issues arising from the deal, the authority only approved the transaction on condition that Nampak will continue to manufacture in Botswana and not turn the factory into a mere distribution centre.
Nampak is also obliged to sell part of the shareholding in the businesses to a citizen or Botswana controlled company.
Under the deal, BDC is disposing of all the manufacturing assets of Can Manufacturers to Nampak Products Ltd and a yet to be formed special purpose vehicle (Newco).
The Newco will be jointly controlled by BDC and Nampak Limited.
According to the CA, Nampak Southern African Holdings Ltd (NSAH) shall sell shares in Newco of not less than 10% but not more than 20% to a citizen of Botswana controlled entity or citizen of Botswana within 12 months upon implementation of the transaction and the second condition stipulates that the end line business will not relocate out of Botswana and shall remain a manufacturing business and not change into a sole distribution business.
“In the event that market circumstances change to the point where NSAH resolves to exit the market in Botswana, NSAH shall notify the Authority of their intention to sell the company as a going concern to interested parties,” the CA pronounced.
Can Manufacturers produces and supplies a range of cans for packaging of food items.
On the hand, Nampak produces and exports rectangular cans and lids, and large round cans from South Africa into Botswana. Some of the top shareholders of Nampak Limited are Allan Gray Investment Council, The South African Government Employee’s Pension Fund; Lazard Asset Management LLPC Group and Somerset Capital Management.
Can Manufacturers, which is located in Lobatse, was opened in 2008 at a total investment cost P126 million.
The sale to Nampak is seen as part of BDC’s plans to divesting from certain sectors while investing in new ones through joint ventures or greenfield investments.
BDC plans to pump P4.5 billion into several new projects, creating 3,500 direct and indirect jobs, under an ambitious new strategy.
The new 2014-2019 strategy, the corporation says, is aimed at supporting the growth and sustenance of key industries whilst stimulating emerging sectors “to the extent that they are aligned to national goals and priorities.
Targeted sectors include infrastructure and industrial property (P1.5bn), emerging and key industries (P975m), other services (P730m), financial services (P420m), education (P248m) and agri-processing (P180m).
About P1-billion is required in the short-term for several of these projects, which, as revealed by Mmegi recently, include investments into Letshego, Ba Isago, Milk Africa, a private estate in Francistown and a paper project.
BDC says it plans to finance the broader investment strategy through a mixture of domestic borrowings, funding from Development Finance Institutions such as the AfDB and the proceeds of the divestment from projects. Other options include additional capital injection from government and addition of a strategic equity partner.