Railpark mall is owned 100 percent by Botswana Railways, through its subsidiary JTTM Properties (Pty) Ltd.
Letlole, the Botswana Stock Exchange (BSE) listed company told its shareholders in a cautionary statement that the consideration for the sale of shares amounting to P152 million, being 32.79 percent of JTTM’s net asset value as at 30 June 2021 of P463.5 million, will be settled in cash upon fulfilment of the set conditions in the Sale of Shares Agreement.
“The JTTM’s net asset value of P463.5 million (derived from the 30th June 2021 Management accounts) is derived from the fair value of Railpark Mall, its sole investment property, being valued at P690 million (31st March 2021) by Knight Frank Proprietary Limited, after adjusting for the company debt amounting to P167.9 million as at 30 June 2021 and net liabilities of P58.6 million which is mainly deferred tax liability arising from the cumulative revaluation gains of the property’’ the company stated .
Due to the shareholding agreement, JTTM will be an associate of LLR therefore, in line with the company’s accounting policy, JTTM will be equity accounted into LLR’s financial statements and as such the company will recognize its share of JTTM’s profit/loss in the statement of comprehensive income and recognize the carrying value of the investment in associate in the statement of financial position.
LLR expects to realize an attractive distribution and net asset value returns from this transaction as it will be yield and value accretive to LLR. In addition, the acquisition will further diversify the company’s portfolio through increased exposure in the prime retail sector reiterating further the Company and the board’s commitment to delivering on the growth strategy and creating value for its shareholders. The transaction is subject to certain conditions precedent to the sale of shares agreement, one of which is the regulatory approval from the Competition and Consumer Authority.
Letlole management received a lead that a majority interest in Railpark Mall was available for sale in early 2020. However, the onset of the pandemic slowed down progress on advancing the potential transaction until late 2020, while the all-consuming battle with the ex-CEO over the Long-Term Incentive Plan (LTIP) drained most of the company’s focus and the board’ seemingly limited intellectual horsepower. By the time the deal was resurrected, the Grit-BDC axis was now in undeniable control of the Letlole board, having dramatically booted out the board.
Recently, Acting CEO Kamogelo Mowaneng drew analysts’ attention to the retail sector which has witnessed quite a lot of developments. “We are seeing newer retail sectors come up, the likes of smart partnerships in the CBD,” Mowaneng said, adding that others are in Francistown and Letlhakane. “We are looking domestically for assets available as well as regionally,” she said.
Letlole la Rona was incorporated in 2010 .The company acquired properties from three subsidiary companies belonging to Commercial Holdings (Pty) Ltd, Western Industrial Estates (Pty) Ltd and Botswana Hotel Development Company (Pty) Ltd. The mix of properties, including hotel, commercial and industrial properties represents a diversified yet balanced portfolio mix of long term and short term rentals in the tourism and industrial sectors of the economy. Letlole La Rona has been set up by BDC through the local stock exchange to continue its drive to support financial markets in Botswana at the same time giving Batswana an opportunity to participate in its investments.