CEDA completes Venture Fund divestments
Pauline Dikuelo | Friday November 10, 2017 15:31
Speaking to BusinessWeek, the agency’s chief operations officer Andrew Madeswi said they have divested from all the 10 investments under the P200 million fund.
Following end of the fund lifespan in 2013, the process to divest from the companies was delayed as the agency was waiting for the results of the audit.
“The agency has divested from all investments that we held under CEDA Venture Capital Fund. There is none that is currently under the portfolio of CEDA,” he said. Some of the companies that were in the CVCF portfolio included Delta Dairies (liquidated), AON Botswana, PG Timbers, Mabule Breweries, Airway Express, ZS Botswana, Builders Merchants Botswana, Tannery Industries Botswana (liquidated) and Biz Capital. The minimum amount for investment under the fund was P500,000 with a ceiling of P30 million. Under a 10-year deal, VPB was in 2003 tasked to manage the P200 million fund and invest in different economic sectors through either debt or equity.
At the end of the 10-year lifespan of the fund, some of the companies invested in had been liquidated, while the fund managers had managed to exit some of the investments. According to the agency, they then had to conduct an audit on the fund following the end of its lifespan to review the activities of the fund since inception.
Initially there was an agreement that CEDA was supposed to take 49% stake in each investment, but there were times where the fund would go beyond that which then forced the agency to consolidate them to CEDA structures. However, the agency said this delayed their financials as they were waiting for the results of the audit. “The review of the CVCF has been completed. It should be noted that the audit was part of a process that would ultimately bring CVCF to a formal closure and that the report would be shared internally with relevant structures,” he said. Initially, the CVCF had targeted a 23% rate of return on investments.
An external audit carried-out by PricewaterhouseCoopers (PwC) Botswana for the year ended March 2014, also questioned the CVCF’s decision to provide interest-free convertible loans to collapsed Delta Dairies when CEDA’s investment guidelines stipulate that financial assistance should be provided at subsidised rates.
PwC also queried the decision to take up a 94% stake valued at over P100 million in the dairy company when the guidelines only allow maximum investment of P30 million in a single entity.