Botswana Development Corporation (BDC) has come to the rescue of its cash strapped subsidiary, Lobatse Clay Works (LCW), injecting P41 million for the firm’s turnaround.
Last year the iconic company, which is wholly owned by BDC, halted its operations and failed to pay close to 500 employees’ salaries, after years of financial distress. The 26-year-old firm’s revival plans were shattered after failing to get a P60 million cash injection from the Botswana Opportunities Partnership Fund (BOP), which had moved to take up to 80% equity. The BOP, a P500 million private equity fund sponsored by the Botswana Public Officers Pension Fund (BPOPF) and asset management firm, Capital Management Botswana, was the subject of extensive litigation between the two former partners, resulting in a Court of Appeal verdict for the pension fund last year.
In the dispute between the two, planned investments including the LCW deal, fell through the cracks and the Lobatse firm, which had been struggling for years, found itself in dire straits. BDC head of corporate affairs and strategy, Boitshwarelo Lebang said the corporation remained committed to ensuring that LCW returns to sustainable operations.
She said prior to the P41 million recapitalisation, the BDC had invested a total of P122 million in LCW over the years.
“The corporation remains committed to seeing the turnaround plan for the business to its conclusion and will continue to support the business whilst we engage with potential partners and all other relevant parties,” she said.
She said the corporation is aware of the firm’s importance to the Lobatse economy, hence the commitment to turning it around into a sustainable enterprise that can contribute meaningfully. “Not so long ago LCW was a profitable company producing more than 30 million bricks per annum and we are confident that it can regain its glory,” she said.
Over the decades, LCW has developed into a proudly local household name, having been involved in most of Botswana’s major construction projects including government buildings, schools and clinics.
The company manufactures and supplies a variety of clay products, including face bricks, pavers and special shaped bricks locally, with exports into the region.
“As government’s investment arm, we are committed to driving sustainable investments in the country that deliver value to the economy on many fronts,” Lebang said.