The newly listed Botswana Telecommunications Corporation Limited’s (BTCL) share price has been on a free fall recently, losing total of 25 Thebe up to Friday this week. The local bourse – Botswana Stock Exchange (BSE) – announced a trading halt of BTCL shares on Thursday to allow for dissemination of information through the BSE regarding changes to BTCL Employee share Trust. Trading on the shares resumed on Friday following the lifting of the suspension. After completing an IPO, which was described by officials as extraordinary resulting in oversubscription and subsequently listing on the Botswana Stock Exchange (BSE) three weeks ago, some investors are anxious as the share price seems to be heading back to its listing price of 100 Thebe a share.
When it arrived as a new entity at the exchange house on April 8, BTCL was among the companies whose share prices made a huge jump on first trading day and reached the highest of 135 Thebe per share since listing. The BTCL IPO, which is reported to have been oversubscribed raised P462 million with its previous main shareholder – Botswana Government – receiving P212 million while BTCL retained P250 million to grow the company. Botswana Government remains as the majority shareholder. Tlotlo Ramalepa, an analyst at Motswedi Securities, said on Thursday that the decline in the share might be due to profit taking by the investors following the completion of the IPO. The company is currently on a closed period preparing for the March 2016 year end results expected to be released by the end of June. To this end, Ramalepa said investors who might have sold their shares when they were trading at 135 Thebe, representing a 35 percent increase to their initial investments. The BTCL listed at 100 Thebe per share.
Employee Share Ownership Plan
BTCL announced on Friday that it intends to amend the terms of the Trust in order to establish an Employee Share Ownership plan (ESOP). The amendment will allow BTCL employees to directly own BTCL shares and permit them full voting and profit participation rights. The altercation will further give the employees the ability to buy and sell BTCL shares, which could have been otherwise not the case under the old arrangement. The final terms of the ESOP are yet to be determined. By the time the trading was suspended on Thursday, BTCL shares were trading at 112 Thebe share.
Board of Directors
Another subject on the corridor on the BTCL is its corporate governance structure. Post listing, the company has inherited the board of directors who were sitting on the board when the company was still a parastatal. BTCL spokesperson, Golekanye Molapisi, however, said the decision to appoint a new or retain the current board of directors chaired by Daphne Matlakala will be made at the Annual General Meeting (AGM). Other board members include Gerald Nthebolan, Alan Boshwaen, Rejoice Tsheko, Serty Leburu and Paul Taylor as the Managing Director. Parastatals’ board of directors is usually appointed by the relevant minister, in some cases with the assistance of PEEPA. It however remains to be seen if there would be a change or the current board will be retained at the AGM. When trading business closed on Friday, the company share price was 110 Thebe.