Letshego Africa plans to issue almost 1.1 billion new shares to raise P800 million, with most of the proceeds earmarked for debt repayment in a move that would reduce, but not eliminate, borrowings at the holding company.
The proposed rights offer will increase the financial services group’s issued shares by about half, with its largest shareholder, the Botswana Public Officers Pension Fund (BPOPF), agreeing to buy any shares left untaken by other investors.
The fundraising comes as Letshego retreats from five African markets. Most of the proceeds will go towards debt repayment, while transaction costs will absorb more than P30 million.
Using December 2025 balances, the rights-offer circular shows holding-company borrowings falling from P3.19 billion to about P2.42 billion after the transaction, a reduction of roughly 24 percent.
The offer itself carries a substantial cost. Letshegoestimates transaction expenses of P30.42 million, including P16 million for BPOPF’s underwriting commitment and P14 million for adviser Absa Bank Botswana. The two fees account for almost all of the disclosed costs.
BPOPF’s changing role
BPOPF, which holds approximately 37.2 percent of Letshego, has agreed to take up shares that other investors do not subscribe for. The arrangement provides backing for the entire P800 million offer and could increase the pension fund’s ownership, depending on participation by other shareholders.
For underwriting the offer, BPOPF will receive a 2 percent fee, equivalent to P16 million.
Its support comes after a separate period as a short-term lender to the group. In an announcement dated October 7, Letshego said it had fully repaid BPOPF’s loan facility, including accrued interest, on September 29, its maturity date.
The facility followed shareholder approval in 2025, with the earlier arrangement providing for bridge funding of up to P483 million.
The repayment notice says no principal or interest remains outstanding under the facility. However, it does not disclose where Letshego obtained the funds to settle the loan, leaving its effect on cash and other borrowings unclear.
The debt build-up
Letshego’s financial disclosures, analysed by The Business Weekly and Review, show how borrowings accumulated before the latest attempt to reduce debt and simplify the group’s operations.
Borrowings stood at approximately P7.38 billion in 2021, rising to slightly more than P8 billion in 2022 and P9.63 billion in 2023. By December 2024, they had reached P9.68 billion, about 31 percent above the 2021 level.
The sharpest increase came in 2023, when borrowings rose by almost 20 percent. Management attributed the increase at the time to strong demand for core loan products, additional funding buffers at subsidiaries and growing financing requirements from fintech and mobile-network partners.
Under Letshego’s latest strategy, which seeks to “reduce borrowings and grow deposits to fund the growth in advances”, group borrowings, including businesses earmarked for sale, fell to approximately P9.1 billion in 2025.
However, that reduction was considerably smaller than the 16 percent decline indicated by comparing the main balance-sheet borrowing figures alone.
As of June 2026, the main borrowings line stood at P8.27 billion.
The price of reducing debt
Letshego’s case for replacing debt with equity rests partly on the prospect of lower interest costs.
The circular estimates transaction expenses at P30.42 million, excluding VAT. In addition to BPOPF’s P16 million underwriting fee, the costs include P14 million for transaction adviser Absa Bank Botswana, along with smaller amounts for listing, legal and other services.
There is, however, a small discrepancy within the circular. Its illustrative financial statements use transaction costs of P30.2 million and net proceeds of P769.8 million.
Both presentations indicate that roughly P770 million, rather than the full P800 million raised, would be available to reduce borrowings after transaction costs.
The potential benefit is lower interest expense. Letshego’s illustrative calculation shows a P93.2 million reduction in annual interest costs if the transaction and debt repayment had occurred at the beginning of 2025.
That, however, is a historical illustration rather than a guaranteed future saving.
For shareholders, the transaction also means a substantially larger share base. Letshego plans to offer 1,095,890,411 new shares at 73 thebe each, increasing the number of issued shares from approximately 2.18 billion to 3.27 billion.
