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Frequently asked questions on the BTCL IPO

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What is an IPO?
An Initial Public Offering, or IPO, is the first offer by a company of its shares for sale or subscription by members of the public.  The Government is selling 49 percent of its shares in BTCL through an IPO.

Does this IPO mean BTCL is being sold?
Yes; however, Government is only offering 49 percent of the shares of the company, of which 5 percent has been reserved for BTCL employees. The remaining 51 percent of the shares will be retained by government.

What percentage of BTCL will be put on the market?
49 percent of the shares of BTCL will be offered to the public. Of this, 5 percent will be offered to citizen employees of BTCL. The remaining 51 percent of the shares will be retained by Government.

How many shares are being offered?
The Offer comprises 462,000,000 Shares of which 250,000,000 are to be issued and allotted by the Company and 212,010,000 Shares to be sold by the Selling Shareholder. Simply put, 462,000,000 Shares of BTCL are offered to the public through this IPO
How will the IPO process ensure that small investors’ interests are safeguarded?

A share allotment strategy is in place to ensure that all citizens are given equal opportunity to buy BTCL shares. Essentially all offers are treated as equal. However, smaller investors will be given preference to ensure that all their offers are accepted in the event there is an oversubscription. This means, in the event of an oversubscription, you are not guaranteed to be allocated all shares you apply for.

What happens if there are more Offers than shares on offer?
This situation would be called an oversubscription. The Allotment Committee would then sit and decide how to ensure as wide a spread as possible is achieved of shares allocated. In an oversubscription situation one may not receive the total number of shares they applied for. The funds would be returned to the investor for the shares they did not get.

What is an IPO Opening/Offer Opening?
The opening of the IPO or the Offer refers to the start date for the period in which parties interested in purchasing shares can apply for them. Applications for the shares can be made throughout the stipulated period in which they will be on offer. The Offer Period is from 09h00 on 11th January 2016 to 17h00 on 4th March 2016. Offers WILL NOT be received after this date.

When will the BTCL IPO open?
The BTCL IPO offer period, the period in which parties interested in purchasing shares can submit applications for them, is from 11 January 2016 at 09h00 to 04 March 2016 at 17h00. During this period, completed BTCL IPO application forms, proof of Botswana citizenship, and payment of shares will be accepted by the receiving bank, Barclays Bank of Botswana. Offers WILL NOT be received before or after these dates.

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‘Manufacturing holds key to economic growth’

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Barclays bank’s economist Naledi Madala has urged the country to consider manufacturing, as a key tailwind to drive the economy and reduce inequality.

She was speaking at a gathering organised by the bank which focused on economic outlook for 2019. “We should not make a mistake of leapfrogging without manufacturing,” said Madala, lamenting that the country’s diversification remains a pipeline dream, as the diamond is still the economy’s mainstay. She bemoaned that mining activities in the country could not spring forward diversification, though non-mining GDP has been steady over the years.

“Extractive industries are not good stepping stones for diversification, the sector does not prepare us for the next step,” said Madala at the Barclays’ Economic Outlook Forum Review 2019. The economist further noted that government should confront head-on challenges of productivity and competitiveness to attract the much needed Foreign Direct Investment (FDI). Though diversification efforts continue to hit a brick wall, Madala said the country should expect increased activities in the mining sector hinged to ramp up in coal production in the year ahead.

She also implored government to consider a welcoming attitude towards foreign investors and generous tax incentives to businesses that set up in the country. Madala is also upbeat that the use of public private partnership model could also help diversify the economy coupled with privitisation. “Privitisation will offer opportunities for growth, through the renewed optimism from government, as business confidence has improved,” said Madala.

She implored the government and the business community to access what is going to drive and hinder growth highlighting that key headwinds to growth are income inequality, diversification challenge and productivity, among others. “The pace of poverty reduction has slowed down, while income inequality goes up,” said Madala

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MINISTER BEWAILS BAD REPAYMENT BY YOUTH

Keikantse Lesemela

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Minister of Youth Empowerment, Sports and Culture Development, Tshekedi Khama has told parliament his ministry continues to face challenges on the repayment of Youth Development Fund (YDF) loans.

Recently presenting the budget to Parliament, Khama said this financial year the ministry has received a total of 2582 YDF applications and approved 983of them to the value of P98 million. He said the programme attracts a high level of interest from youth but the ministry is only limited to funding a maximum of 1200 youth projects annually due to budget limitations.

“However the greatest challenge for the Fund is the repayment of the loan component by the majority of the youth businesses. The youth have advanced number of challenges for this including high rentals for operating spaces, low market access owing to tight competition and limited production capacities,” said Tshekedi, adding that they continue to pursue beneficiaries to repay the loans.

Out of the 919 businesses funded 1058 jobs have been created. The minister highlighted that disbursements of funds will continue to be undertaken until the end of the financial year. “The YDF is currently under review in line with the pronouncement made by the President, Dr Mokgweetsi Masisi in the State of the Nation Address, to improve beneficiaries through training, and encourage consortia and cooperatives,” said Tshekedi.

The ministry assists YDF beneficiaries in marketing their products and services through fairs and exhibitions. The ministry also runs entrepreneurship-training seminars for youth and in the past year 3692 young people were trained. Over 600 youth businesses attended fairs and exhibitions to market their products and services. Currently the ministry is collaborating with Local Enterprise Authority (LEA), First National Bank Botswana and Citizen Entrepreneurial Development Agency (CEDA) on training in entrepreneurship development and mentorship of YDF beneficiaries.

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