Ambitious entrepreneur Percy Raditladi is about to list a company that owns a significant stake in Grow Mine Africa (Pty) Ltd, Homec Investments Limited, on the Botswana Stock Exchange.
Grow Mine is the preferred bidder for the multi-billion pula lotto tender that was announced by the Gambling Authority last year.
At a press conference held in Gaborone last Thursday, Raditladi said Homec will issue its Initial Public Offering (IPO) as a Special Purpose Acquisitions Company (SPAC) in a quest to accord interested Batswana an opportunity to have a stake in the lucrative lotto industry. The aim is to raise at least P100 million for use to finance the take-off and rollout of the national lottery soon as Grow Mine Africa Limited is awarded the lottery licence.
Grow Mine is currently in negotiations with the Gambling Authority for finalisation of the lotto licence which is expected to be issued any time.
Raditladi’s company, Homec Investments Limited, is a majority shareholder in Colmar Enterprises Pty Ltd, at 11 percent. Colmar in turn owns shares in Grow Mine Africa, the preferred bidders for the national lottery tender.
At 23.5 percent, Colmar the second largest shareholder in Grow Mine Africa.
Colmar shareholders are Chief Investment Officer at Botswana Development Corporation (BDC) Moatlhodi Lekaukau, former president Ian Khama’s nephews Dale Seretse TerHaar and Marcus Patrick-Khama TerHaar, Botswana Football Association (BFA) president Maclean Letshwiti, former Puma Energy Botswana Managing Director Mahube Mpugwa, as well as Frederick Selolwane, Itumeleng Ramsden, Bing Liu, and Homec Investments Propriety Limited itself, which is owned by Boitumelo Paya, Larona Makgoeng and Percy Raditladi.
According to records available at the Companies and Intellectual Property Authority (CIPA), Botswana’s second largest retailer by footprint, Sefalana Holdings Company Limited, is the largest shareholder in Grow Mine Africa at 40 percent. The third largest shareholder in Grow Mine, at 13 percent, is a company named Citizen Money Makers Propriety Limited that is owned by Boipuso Molatlhegi, Cinderella Molome, Boatametse Mpofu, Thato Raletsatsi and Kebobonye Pabalinga. Managing Partner at Collins Newsman & Co, Parks Tafa, owns 10 percent in Grow Mine through his company Idlehill Propriety Limited. Carthage Ringo Matlhaga, through his company Carthlee Inventions Propriety Limited, owns 10.5 percent in Grow Mine, while Mokgethi Frederick Magapa owns 3 percent.
Grow Mine boasts the largest citizen consortium ever. However, Raditladi says should Homec successfully list, the scope of citizen empowerment would be broadly expanded, more so that Sefalana, also a listed company, gives the general public an opportunity to also benefit from the lotto by buying shares on the BSE.
A special purpose acquisition company (SPAC), the model which Homec has adopted, is a company with no commercial operations but is formed strictly to raise capital through an IPO for the purpose of acquiring an existing company. In the case of Homec, their primary role will be financing of the lotto tender rollout.
Also known as Blank Cheque Companies, SPACs have been around for decades, according to Investopedia. In recent years, they have become more popular, attracting big-name underwriters and investors and raising a record amount of IPO money in 2019. As of the beginning of August 2020, more than 50 SPACs have been formed in the United States and have raised some $21.5 billion.
SPACs are generally formed by investors, or sponsors, with expertise in a particular industry or business sector, with the intention of pursuing deals in that area. In creating a SPAC, the founders sometimes have at least one acquisition target in mind.
According to Raditladi, the money that Homec will raise at its IPO will be placed in an interest-bearing trust account. He said the funds cannot be disbursed except to finance the lotto, and that the funds will be under the monitoring of capital market regulators. “If the funds do not serve their purpose in two years, the money will be returned to the owners,” he said, adding that investors’ money will be absolutely safe.
A SPAC generally has two years to complete a deal or face liquidation. In some cases, some of the interest earned from the trust can be used as the SPAC’s working capital. After an acquisition, a SPAC is usually listed on one of the major stock exchanges. Raditladi expects that by July, the IPO process should be completed. Homec is currently listed on the Tshipidi SME Board of the BSE. The CEO of BSE, Thapelo Tsheole, has confirmed that Raditladi, through Homec, has expressed interest to list. “We are only waiting for his application and if it is a quality listing, it will be approved,” Tsheole said.