BDC to shed property investments

MBONGENI MGUNI
Staff Writer | Tuesday March 23, 2010 00:00

 

The divestiture is part of BDC's Strategic Plan for 2007 - 2011. Between 2007 and 2008, BDC reviewed its various wholly, owned and equity property assets with a view to shedding its interest in selected properties.

BDC's strategists are targeting mature investments for divestment, thereby unlocking funds that will kick-start a process through which local investors will tap into the profitability of the property investments.

According to information available, BDC plans to off-load targeted properties into a Property Fund that will create the basis for an Initial Public Offering on the Botswana Stock Exchange, giving citizens and managers a new class of investment opportunity.

'As part of its Strategic Plan 2007-2011, the Corporation is well advanced into its divestment programme,' BDC said at the unveiling of its 2009 year-end results recently.

'The proceeds to be generated from this exercise shall be used by the Corporation to venture into new investments, some of which will be large scale projects.'

However, BDC officials had not elaborated on the divestiture, having failed to respond to written enquiries by press time.

By June 2008, BDC had P460.9 million invested in wholly-owned property subsidiaries with an additional P42.3 million invested in associated companies and partnerships. The parastatal's property portfolio comprises residential, commercial, hotel and industrial properties, with the latter making up approximately 49 percent of the entire asset book.

Hotel investments, which make up 33 percent of the property portfolio, include a substantial investment in Peermont Global Botswana, which owns the Grand Palm Casino, the Gaborone International Convention Centre, Metcourt Inn, Walmont Ambassador and Mondior Summits. BDC holds 40 percent equity in Peermont Global Botswana, with the parent company, Peermont Global, holding the balance.

On Friday, Peermont Global Botswana Regional Director, Bruce Page-Wood, said BDC was yet to communicate any planned divestiture from their partnership.

'I'm not aware of any approach they have made to us,' he said. 'Should they make an approach, our board will decide whether we will take up their shareholding.'