Advisors Hired to Steer BTC Privatisation in Botswana

Botswana newspaper the Sunday Standard has reported that a consortium of members from Deloitte and local law firm Collins Newman & Co has been hired to advise on the privatisation of Botswana Telecommunications Corporation (BTC). 

The pair won the tender, which was launched late last year, beating off competition from four other local consortiums. ‘Their role as advisors will be to undertake evaluation of BTC assets, develop due diligence, build a structure of shares as well as ensure transaction closures at BTC,’ the Public Enterprises Evaluation and Privatisation Agency (PEEPA) stated.

In November 2010 president of Botswana, Ian Khama, confirmed plans to privatise incumbent telco BTC through an initial public offering (IPO) by April 2011. Under the sale plans a 49% stake will be sold to investors and BTC employees, while the government will retain the remaining 51%.

Shares will be sold to citizens in stages on the condition that when investors wish to dispose of their shares, the government will have the first option to buy them back.

BTC IPO For Next Year

Botswana’s Public Enterprises Evaluation and Privatisation Agency (PEEPA) has said that an initial public offering (IPO) for fixed line incumbent Botswana Telecommunications Corporation (BTC) is likely to take place after the end of the operator’s financial year in March 2011.

Local news source Mmegi Online reports that a 49% stake in BTC will be sold to investors and BTC employees, while the government will retain the remaining 51%. Commenting on BTC’s privatisation, Kgotla Ramaphane, CEO of PEEPA, said: ‘The process involves the appointment of advisers for the IPO and many other stakeholders,’ Ramaphane noted, adding: ‘We are working towards the end of the financial year, which is March 2011.

At this time, we should know the date for the IPO. However, there is a lot of groundwork and further discussions to be had before we can arrive there.’ According to the operator’s spokesperson Anno Tsie, discussions will involve the number of shares that will be set aside for BTC employees, as well as the price of shares and the listing requirements for the Botswana Stock Exchange.

The privatisation of BTC was first mooted in June 2006, with initial plans envisaging the sale of between 40% and 49% of the telco to a strategic investor and a 5% share to BTC employees. The remaining shares would be retained by the government for a future stock market listing. The first stage of the privatisation began in January 2007, with a tender put out for ‘advisory services’.

In February 2008 PEEPA signed a contract with the International Finance Corporation (IFC) to act as transactional advisor in the privatisation. The IFC completed due diligence in November 2008 and in 2009 the Botswana Telecommunications Corporation (Transition) Bill was enacted in parliament, which established BTC as a public company under the Company Act.

BTC Privatisation Plans On

The government of Botswana has reaffirmed its goal of privatising incumbent telecoms operator Botswana Telecommunications Corporation (BTC), local newspaper The Sunday Standard reports. Presidential affairs minister Lesego Motsumi told parliament that ‘the cabinet has now taken a decision on the privatisation structure of BTC and the information will soon be communicated with all stakeholders.’

Motsumi added that the process was delayed because the government had to carry out lengthy consultation activities with all of the telco’s stakeholders in a bid to minimise risks and maximise benefits.

The privatisation of BTC was first mooted in June 2006, with initial plans envisaging the sale of between 40% and 49% of the telco to a strategic investor and a 5% share to BTC employees. The remaining shares would be retained by the government for a future stock market listing.

The first stage of the privatisation began in January 2007, with a tender put out for 'advisory services'. In February 2008 the Public Enterprises Evaluation and Privatisation Agency (PEEPA) signed a contract with the International Finance Corporation (IFC) to act as transactional advisor in the privatisation. The IFC completed due diligence in November 2008 and in 2009 the Botswana Telecommunications Corporation (Transition) Bill was enacted in parliament.