CA green-lights CMB�s Lobatse Clay Works acquisition
Staff Writer | Tuesday September 19, 2017 15:50
CMB is buying an 80% stake in Lobatse Clay Works from Botswana Development Corporation (BDC) through its private equity fund, The Botswana Opportunities Partnership (BOP).
In a statement, the CA said analysis of the facts of the merger, show that the proposed transaction is not likely to result in the prevention or substantial lessening of competition, or endanger the continuity of the services offered in the market under consideration.
“Pursuant to the provisions of section 60 of the Competition Act, the Authority has unconditionally approved the proposed acquisition of 80% ordinary shares of Lobatse Clay Works by Botswana Opportunity Partnership through its general partner Capital Management Botswana (Pty) Ltd,” the CA stated.
CMB is an investment company that specialises in private equity management and its directors are Rapula Okaile and Timothy Marsland. The Botswana Public Officers Pension Fund (BPOPF) is the main investor in the BOP, having invested P830 million thus far. Through the BOP, CMB has invested in different sectors of the economy with the BPOPF increasing its mandate from the initial P500 million to P830 million last year.
In an earlier interview, BPOPF chief executive officer Boitumelo Molefe said that they decided to extend CMB allocation because of the pace at which they were finding suitable private equity investments. “They have very little dry powder with a lot of projects in the pipeline. Some of the companies they have invested in include Bona Life, Wilderness Safaris and another company operating in Mozambique,” she said. The BPOPF, which is Botswana’s largest pension fund with over 150,000 members, has P55 billion in assets under management (AUM) with 58% of the funds invested offshore. On the other hand, Lobatse Clay Works was established as a private company in 1992 and is wholly-owned by BDC.
Lobatse Clay Works, which exports clay face bricks to South Africa and Namibia, produces in excess of 30 million units per year and is involved in most of Botswana’s major construction projects.
The divestments by BDC is part of its strategy adopted in 2014 in which it said it would sell 12% of its portfolio in ‘matured industries’ and invest in new sectors.
BDC has so far sold commercial and residential properties around the country and other companies such as Cumberland Hotel, Toro Lodge, and Khawa Lodge as well as disposing of its stakes in Metropolitan Botswana, Asphalt Botswana and Kwena Rocla, Golden Fruit and Can Manufacturing. As part of its ambitious strategy, BDC is investing in new projects that will not only boost the industrialisation agenda of the country but also diversify Botswana’s exports composition, which is currently dominated by diamonds.
Industries targeted under the strategy include large-scale investments of not less than P30 million in sectors such as energy, in particular solar power plants, manufacturing, agriculture and other infrastructure projects.