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Circular to shareholders
Letshego Holdings Limited
Incorporated in the Republic of Botswana
Registration number 98/442
Instrument code: LHL17 ISIN: ZAG000132234
Instrument code: LHL18 ISIN: ZAG000132242
Instrument code: LHL19 ISIN: ZAG000132259
Instrument code: LHL22 ISIN: ZAG000139353
Instrument code: LHL26 ISIN: ZAG000141268
(“Letshego Holdings” or “the Company”)
This announcement is being released on the Johannesburg Stock Exchange for information purposes only
in respect of Letshego Holdings Limited’s Note Programme.
CIRCULAR TO SHAREHOLDERS
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
Action Required:
- If you are in any doubt as to the course of action to be taken, you should consult your
stockbroker, banker, lawyer, accountant or other professional adviser immediately.
- If you have sold or transferred all your shares in Letshego Holdings Limited (“Letshego” or
“the Company”), you should at once hand this Circular to the agent through whom you effected
the sale and transfer, for transmission to the purchaser or transferee.
- This Circular incorporates listing particulars and is issued in compliance with the Listing
Requirements of the Botswana Stock Exchange for the purpose of giving information to the
public with regard to the Shareholders of Letshego.
Incorporated in the Republic of Botswana
Registration Number: Co. 98/442
Date of Incorporation: 4 March 1998
ISIN: BW 000 000 0322
(“the Company”)
CIRCULAR TO SHAREHOLDERS
in relation to the
NEW PROPOSED SHARE BUY-BACK MANDATE OF LETSHEGO TO PURCHASE ITS OWN ORDINARY SHARES OF UP TO TEN PER
CENT (10%) OF THE STATED SHARE CAPITAL OF THE COMPANY AND RETAINING THOSE SHARES AS TREASURY SHARES
UP TO FIVE PER CENT (5%) OF THE STATED SHARE CAPITAL OF THE COMPANY AND CANCELLING THE REST RESULTING
IN A SUBSEQUENT REDUCTION OF CAPITAL
SECTION 2: CORPORATE INFORMATION
Directors
E.N. Banda (Chairman) (RSA) 7304 Burdette Court, Bethesda MD 20817
USA
A C M Low (Managing Director) (UK) Plot 378, President Drive Gaborone,
Botswana
C Patterson (Chief Financial Officer) (Ireland) Plot 1293, Mogoditshane, Gaborone,
Botswana
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J S de Kock (RSA) 3 Antonie Street, De Zalze Winelands Golf
Estate, Stellenbosch 7600, RSA
G L Van Heerde (RSA) 7 Mountainview Crescent, Durbell,
Durbanville 7550, RSA
G Hassam (Malawi) Plot 13084, Broadhurst, Gaborone, Botswana
I M Mohammed (USA) 234 Battersea Bridge Road, SW103AA,
London, UK
S D Price (UK) MH3 Marinascape, Dubai, UAE
R Thornton (USA) 3 Spring Hope, Jamestown, North Carolina,
27282, USA
H R Karuhanga (Uganda) 21 Princess Anne Drive, Bugolobi,
Kampala, Uganda
G Somolekae (Botswana) Plot 55606 Phakalane, Gaborone, Botswana
C van Schalkwyk (RSA) Williston, Northern Cape Province, RSA
Details of the directors occupation and their relevant business experience over the last three years
is set out as an appendix to this Circular. This information is also available on www.letshego.com
as well as in the annual report for the year ended 31 December 2016
Registered Office Company Secretary
PricewaterhouseCoopers T Chilume
Plot 50371 Letshego Place, Plot 22 Khama
Crescent
Fairground Office Park Second Floor
P O Box 294 P.O. Box 381
Gaborone, Botswana Gaborone, Botswana
Legal Advisors Auditors
Armstrongs Attorneys PriceWaterhouseCoopers
Acacia House Plot 50371
Central Business District Fairground Office Park
P.O. Box 1368 PO Box 294
Gaborone, Botswana Gaborone, Botswana
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Sponsoring Brokers Transfer Secretaries
African Alliance Botswana Securities Limited PricewaterhouseCoopers
Plot 64511, Fairgrounds Office Park Plot 50371, Fairground Office Park
PO Box 2770 PO Box 294
Gaborone, Botswana Gaborone, Botswana
TO: SHAREHOLDERS OF THE COMPANY
Dear Sir/Madam,
NEW PROPOSED SHARE BUY-BACK MANDATE OF LETSHEGO TO PURCHASE ITS OWN ORDINARY SHARES OF UP TO TEN PER
CENT (10%) OF THE STATED SHARE CAPITAL OF THE COMPANY AND RETAINING THOSE SHARES AS TREASURY SHARES
UP TO FIVE PER CENT (5%) OF THE STATED SHARE CAPITAL OF THE COMPANY AND CANCELLING THE REST RESULTING
IN A SUBSEQUENT REDUCTION OF CAPITAL
1. INTRODUCTION
1.1. Letshego Holdings Limited was incorporated in 1998, is headquartered in Gaborone and has
been publicly listed on the Botswana Stock Exchange (BSE) since 2002. It is an inclusive
finance focused group with consumer, micro-lending and deposit-taking subsidiaries across
sub-Saharan Africa. Further information is available at www.letshego.com
1.2. The Board is pleased to announce an intention by the Company to seek the Shareholders’
approval to purchase up to ten per cent (10%) of the stated share capital of the Company,
retaining those shares as treasury shares up to five per cent (5%) of the stated share
capital of the Company and cancelling the rest of the shares with effect of reducing the
share capital, at the forthcoming AGM to be held on the 24th of May 2017.
1.3. The purpose of this Circular is to provide you with the details of the Proposed Share Buy-
Back, retention of those shares as treasury shares up to five percent (5%) of the stated
share capital of the Company and the subsequent Reduction of Capital and the resolutions
proposed to be passed relating to the Proposed Share Buy-Back and the subsequent Reduction
of Capital as set out in the notice of the AGM.
1.4. A public notice for the Reduction of Capital will be issued in terms of Section 59 (2) of
the Act and will be filed at CIPA in terms of Section 66 (5) (b) of the Act in respect of
the purchase by the Company of its own shares.
2. DEFINITIONS
In this section, unless the context indicates otherwise, the terms in the first column have the
meanings assigned to them in the second column. Words importing the singular shall, where
applicable, include the plural and vice versa, and words importing the masculine gender shall,
where applicable, include the feminine gender and vice versa. Reference to persons shall
include corporations.
“Act” Companies Act, Cap 42:01 as may be amended, modified or
re-enacted from time to time;
“AGM” the annual general meeting of the Company to be held on
the 24th of May 2017;
“Board” the Board of Directors of Letshego;
“BSE” Botswana Stock Exchange;
“BWP” the legal tender of the Republic of Botswana in which all
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monetary amounts in this Circular are expressed;
“CIPA” Companies and Intellectual Property Authority,
established in terms of the Companies and Intellectual
Property Authority Act, Cap 42;13;
“Constitution” the Constitution of Letshego Holdings Limited;
“Circular” this Circular incorporated in the notice of the AGM
including the appendices and Form of Proxy;
“CSDB” the Central Securities Depository Botswana, a public
company with limited liability duly incorporated in
accordance with the laws of Botswana and operates as a
central depository to the BSE;
“Director” a person holding office as a director for the time being
of the Company;
“EPS” the earnings per share of the Company;
“Letshego “or the “Company” Letshego Holdings Limited, a public company incorporated
according to the laws of Botswana and listed on the BSE;
“Letshego Shares” or “Shares” the ordinary shares in Letshego;
“the Last Practicable Date” is 6 April 2017, being the last day before the date of
issue of the Circular;
“Listing Requirements” Listing Requirements of the BSE;
“Market Day” a day on which the BSE is open for trading in securities;
“NAV” Net Asset Value;
“Ordinary Resolution” the ordinary resolution to be passed by the Shareholders
approving the Proposed Share Buy-Back;
“Proposed Share Buy-Back” proposed share buy-back to purchase the Company’s
ordinary shares of up to ten per cent (10%) of the
Company’s stated share capital;
“Reduction of Capital” the proposed reduction of the stated share capital of the
Company, pursuant to the Proposed Share Buy-Back;
“Shareholders” registered holders of Shares and in respect of the
depositors whose securities accounts are credited with
Shares with the CSDB, persons whose interests in Shares
are held with the CSDB;
“Share Buy-back Mandate” the general mandate to authorize the Directors to
exercise all the powers of the Company to purchase or
otherwise acquire its issued Shares upon and subject to
the terms of such mandate;
“Special Resolution” the special resolution to be passed by the Shareholders
approving the Reduction of Capital;
“Substantial Shareholder” a Shareholder who has an interest in five per cent (5%)
or more of the total number of issued Shares; and
“Treasury Shares” up to five per cent (5%) shares that may be retained as
treasury shares pursuant to the Share Buy-back Mandate
being approved.
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3. DETAILS OF THE NEW PROPOSED SHARE BUY-BACK MANDATE OF LETSHEGO TO PURCHASE ITS OWN ORDINARY
SHARES OF UP TO TEN PER CENT (10%) OF THE STATED SHARE CAPITAL OF THE COMPANY AND RETAINING
THOSE SHARES AS TREASURY SHARES UP TO FIVE PER CENT (5%) OF THE STATED SHARE CAPITAL OF THE
COMPANY AND CANCELLING THE REST RESULTING IN THE SUBSEQUENT REDUCTION OF CAPITAL
3.1. Background
The Directors of Letshego propose to seek a new Share Buy-back Mandate from the
Shareholders to purchase up to a maximum of ten per cent (10%) of the stated share capital
of the Company by way of on-market Share Buy-back (as defined in clause 3.3 below) and
pursuant to that, retain those shares as Treasury Shares up to five per cent (5%) of the
stated share capital of the Company and cancel the rest of the shares and effect a
Reduction of Capital on the shares purchased.
3.2. Regulatory Compliance
3.2.1. The Proposed Share Buy-back, the retention of Treasury Shares and the subsequent
Reduction of Capital, is subject to compliance with the Listing Requirements, the
Act, the Constitution and any prevailing laws, rules, regulations, orders,
guidelines and requirements issued by the relevant authorities.
3.2.2. Pursuant to the Act, Letshego may only effect a Proposed Share Buy-back, retain
some of those shares as Treasury Shares and cancel the rest of the shares and
implement the Reduction of Capital if:
3.2.2.1. the Constitution of the Company expressly permits the Company to retain
some of those shares as Treasury Shares and cancel the rest of the
shares and implement a Reduction of Capital; and
3.2.2.2. the Board of the Company having exercised its discretion, resolved that
the shares concerned shall be retained as Treasury Shares up to five
per cent (5%) of the stated share capital of the Company and the rest
cancelled on acquisition and the Reduction of Capital be implemented.
3.2.3. The Shareholders will be requested to approve the following resolutions, which
will be incorporated in the Notice of Meeting of the AGM to be held on the 24th of
May 2017:
“ORDINARY RESOLUTION
Proposed Share Buy-back Scheme of Letshego to purchase its own shares up to
ten per cent (10%) of the stated share capital of the Company.
“THAT, subject to the Company’s compliance with all rules, regulations,
orders and guidelines made pursuant to the Companies Act, Cap 42:01 as
amended from time to time, the provisions of the Company’s Constitution and
the Listing Requirements of the BSE, the Company be and is hereby authorized
to the fullest extent permitted by law, to buy back at any time such amount
of ordinary shares of no par value in the Company as may be determined by
the Directors of the Company from time to time through the BSE, upon the
terms and conditions that may be deemed fit and expedient in the interest of
the Company (“Proposed Share Buy-back”), provided that:
a) the maximum number of shares in aggregate which may be purchased and
then cancelled by the Company at any point of time pursuant to the
Proposed share Buy-Back, shall not exceed ten per cent (10%) of the
total stated share capital of the Company for the time being quoted on
the BSE; and
b) the maximum amount of funds to be allocated by the Company pursuant to
the Proposed Share Buy-Back shall not exceed the sum of retained
earnings of the Company based on its latest financial statements
available up to date of a transaction pursuant to the Proposed Share
Buy-Back.
THAT the shares purchased by the Company pursuant to the Proposed Share Buy-
Back may be retained as Treasury Shares up to five per cent (5%) of the
stated share capital of the Company and the rest will be cancelled;
THAT such authority shall commence upon the passing of this resolution,
until the conclusion of the next annual general meeting of the company or
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the expiry of the period within which the next annual general meeting is
required by law to be held, unless revoked or varied by ordinary resolution
of the shareholders of the Company in a general meeting, but so as not to
prejudice the completion of a purchase made before the expiry date;
AND THAT the Directors of the Company be and are hereby authorized to take
all steps as are necessary or expedient to implement or give effect to the
Proposed Share Buy-Back, with full powers to amend and/or assert to any
conditions, modifications, variations or amendments (if any) as may be
imposed by the relevant governmental/regulatory authorities from time to
time and with full power to do all such acts and things thereafter in
accordance with the Companies Act, Cap 42:01 as amended from time to time,
the provisions of the Company’s constitution and the requirements of the BSE
and all other relevant governmental/regulatory authorities.”
“SPECIAL RESOLUTION
Reduction of Capital of Letshego pursuant to the approval of the Share Buy-
back Mandate
THAT, subject to the shareholders of Letshego approving the Share Buy-back
Mandate and it being implemented, the Company be and is hereby authorized in
terms of Section 59 of the Companies Act to reduce its stated share capital
as may be determined by the Directors of the Company from time to time, upon
the terms and conditions that may be deemed fit and expedient in the
interest of the Company (“Reduction of Capital”) provided that:
a) only a limit of 107,202,257 shares shall be reduced from a stated
share capital of 2,144,045,143 shares, such that post reduction the
stated share capital would be 2,036,842,886 shares;
b) alternatively 214,404,514 shares shall be reduced from a stated share
capital of 2,144,045,143 shares, such that post reduction the stated
share capital would be 1,929,640,629 shares in the event that the Board
decides not to retain any Treasury Shares and cancel all the shares
subject to the Share Buy-Back; and
c) the reduction of capital will not result in the Company failing the
solvency test as prescribed in terms of the Act.
THAT such authority shall commence upon the passing of this resolution,
until the conclusion of the next annual general meeting of the Company or
the expiry of the period within which the next annual general meeting is
required by law to be held, unless revoked or varied by special resolution
of the shareholders of the Company in a general meeting or extraordinary
general meeting, but so as not to prejudice the completion of the Reduction
of Capital made before the expiry date;
AND THAT the Directors of the Company be and are hereby authorized to take
all steps as are necessary or expedient to implement or give effect to the
Reduction of Capital with full powers to amend and/or assert to any
conditions, modifications, variations or amendments (if any) as may be
imposed by the relevant governmental/regulatory authorities from time to
time and with full power to do all such acts and things thereafter in
accordance with the Companies Act, Cap 42:01 as amended from to time, the
provisions of the Company’s constitution and the requirements of the BSE and
all other relevant governmental/regulatory authorities.”
3.3. Manner of Share Buy-back
The Proposed Share Buy-back will be made by way of one or more on-market Share Buy-back
Transactions (“On-Market Share Buy-back Transaction”) transacted on the BSE trading
system, from time to time, through one or more duly licensed stockbrokers appointed by the
Company for that purpose.
3.4. Purchase Price
3.4.1. The purchase price (excluding brokerage, commission, applicable value-added tax
and other related expenses) to be paid for the Shares will be determined by the
Letshego committee constituted for the purposes of effecting Share Buy-backs. The
purchase price to be paid for each Share pursuant to the Share Buy-back must not
exceed the Average Closing Price of the Shares (as defined below in clause 3.4.2),
excluding related expenses of the purchase or acquisition, by more than 5%
(“Maximum Price”).
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3.4.2. “Average Closing Price” means the average of the last dealt prices of a Share for
the five consecutive Market Days on which the Shares are transacted on the BSE
immediately preceding any proposed Share Buy-Back in terms of the Share Buy-Back
Mandate.
3.5. Duration of Authority
The authority for the Proposed Share Buy-Back, retention of the Treasury Shares and the
Reduction of Capital will be effective immediately upon the passing of the ordinary
resolution in relation to the Proposed Share Buy-back and the retention of the Treasury
Shares and the passing of the special resolution in relation to the Reduction of Capital
respectively and will continue to be in force until:
3.5.1. the date on which the next AGM of the Company is held or required by law to be
held, unless renewed by an ordinary or special resolution, as the case may be,
either unconditionally or conditionally; or
3.5.2. the Shareholders of the Company revoke or vary the authority; or
3.5.3. the date on which purchases and acquisitions of Shares pursuant to the Share Buy-
back Mandate are carried out to the full extent mandated, retention of the
Treasury Shares and the Reduction of Capital is implemented accordingly
whichever is the earliest.
3.6. Maximum Number of Shares to be Acquired
3.7. As at the last practicable date , the ordinary share capital of the Company is
2,144,045,143 shares of no par value. The maximum number of shares that will be acquired
will not exceed 214,404,514, consisting of ten per cent (10%) of the entire issued share
capital of the Company. Maximum Amount of Funds to be Allocated and Source of Funds
The Company may use its internal or external sources of funds to finance the Share Buy-
back. The Directors do not propose to exercise the Share Buy-back Mandate to such extent
that it would materially affect the working capital requirements, financial flexibility or
investment ability of Letshego. The Share Buy-back will not exceed BWP 436,113,750.24.
This amount has been determined on the basis of a purchase of 214,404,514 shares at an
illustrative price of BWP2.16 per share. The full illustrative effects are set out at
paragraph 6.1.4 below.
3.8. Treatment of Shares Purchased
3.8.1. In accordance with the Act, the Board has resolved to retain the shares to be
purchased in terms of the Share Buy-back Mandate, up to five per cent (5%) of the
stated share capital of the Company, as Treasury Shares and cancel the rest of
the purchased Shares and the Company will make an announcement on the day the
cancellation is made, providing the details of the number of shares cancelled,
the date of the cancellation and the outstanding paid-up share capital after
cancellation. The cancellation of the shares will result in a Reduction of
Capital.
3.8.2. The Treasury Shares may be dealt with in the following ways:
3.8.2.1. the Board may distribute the Treasury Shares as dividends to the
shareholders; or
3.8.2.2. the Board may resell the Treasury Shares on the BSE and use the proceeds
as working capital for potential investment opportunities arising in the
future; or
3.8.2.3. retained as treasury shares;
3.8.2.4. transferred in terms of the rules of group’s existing long term
incentive plan; or
3.8.2.5. deal with the Treasury Shares in any manner they deem fit; or
3.8.2.6. cancel the Treasury Shares.
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3.8.3. In the event that the Board decides to resell the Treasury Shares, the Company
will make an announcement on the day the resale is made, providing the
description of the shares sold, the number of shares sold, the resale price of
each share and the total consideration received. In the case of resale of
Treasury Shares, the Company will resell such Treasury Shares for cash or
transfer the Treasury Shares as consideration for the acquisition of shares or
assets of another company or assets of a person or sell, transfer or otherwise
use the Treasury Shares for such other purpose as may be prescribed by the Board.
3.8.4. In the event that the Board decides to cancel the Treasury Shares, the Company
will make an announcement on the day the cancellation is made, providing the
details of the number of shares cancelled, the date of the cancellation and the
outstanding paid-up share capital after cancellation. The cancellation of the
shares will result in a further Reduction of Capital.
3.9. Rights attached to the Share Buy-back shares
3.9.1. Rights attached to the Treasury Shares
The rights attached to the Treasury Shares in relation to voting, dividends and
participation in any other distribution or otherwise would be suspended and the
Treasury Shares will not be taken into account in calculating the number or
percentage of shares or a class of shares of the Company for any purposes
including the determination of substantial shareholdings, take-overs, notices, the
requisitioning of meetings, quorums for meetings and the results of a vote on
resolutions(s) at meetings.
3.9.2. Rights attached to the cancelled shares
The rights attached to the cancelled shares in relation to voting, dividends and
participation in any other distribution or otherwise shall cease to exist and will
not be taken into account in calculating the number or percentage of shares or a
class of shares of the Company for any purposes including the determination of
substantial shareholdings, take-overs, notices, the requisitioning of meetings,
quorums for meetings and the results of a vote on resolutions(s) at meetings.
3.10. Market Price of Letshego Shares
3.10.1. The highest and lowest traded prices of Letshego Shares on the BSE for each
quarter over the previous two years are as follows:
Aggregate Highest Lowest
Volume traded (thebe) (thebe)
QUARTER 2015
JAN-MARCH 75,908,109 266 234
APRIL-JUNE 83,314,735 351 243
JULY-SEPT 33,632,986 350 306
OCT-DEC 83,651,374 310 290
QUARTER 2016
JAN-MARCH 132,514,428 290 246
APRIL-JUNE 61,748,598 266 249
JULY-SEPT 102,080,211 249 180
OCT-DEC 29,854,061 240 229
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QUARTER 2017
JAN-MARCH 32,914,969 230 205
3.10.2. The highest and lowest traded prices of Letshego Shares on the BSE for the past 11
months are as follows:
Aggregate Highest Lowest
Volume traded (thebe) (thebe)
2016
MAY 28,941,179 266 266
JUNE 14,906,732 266 249
JULY 7,433,249 249 222
AUGUST 18,975,292 220 180
SEPTEMBER 75,671,670 237 208
OCTOBER 11,606,657 240 237
NOVEMBER 7,057,614 240 236
DECEMBER 11,189,790 236 229
2017
JANUARY 764,756 230 221
FEBRUARY 6,070,108 225 213
MARCH 25,993,176 216 205
*as at 31 March 2017 (Source: BSE)
3.10.3. The highest and lowest traded prices of Letshego Shares on the BSE as of the 28th
of March 2017 are as follows:
Date 2017 Aggregated Highest Lowest
Volume traded (thebe) (thebe)
1-Mar - - -
2-Mar 33,505 2.12 2.12
3-Mar 25,781 2.10 2.10
6-Mar 30,206 2.10 2.10
7-Mar - - -
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8-Mar 4,001,070 2.09 2.07
9-Mar 14,558 2.09 2.09
10-Mar 16,419 2.09 2.07
13-Mar 12,534 2.06 2.06
14-Mar 1,602,556 2.06 2.06
15-Mar 953 2.06 2.06
16-Mar - - -
17-Mar - - -
20-Mar 18,100 2.06 2.06
21-Mar 13,521,041 2.06 2.06
22-Mar 1,079,357 2.06 2.06
23-Mar 4,816,286 2.16 2.16
24-Mar 820,568 2.16 2.16
27-Mar - - -
28-Mar 242 2.16 2.16
29-Mar - - -
3.10.4. The last traded price of Letshego Shares on the BSE as of the 28 March 2017, was
BWP 2.16.
3.11. Purchases, Cancellation, Resale of Shares and Reduction of Capital made in the preceding
twelve (12) months
Letshego has purchased its own shares in the period since the 2016 AGM. At the 2016 AGM,
the Shareholders resolved that the Company purchase up to ten percent (10%) of its
shares, which constituted a maximum limit of 218,490,166 shares and have those shares
cancelled. Pursuant to that mandate, 52,782,546 of those shares which constituted 2.41%
of the stated share capital in Letshego were purchased. Those shares have subsequently
been cancelled pursuant to a special resolution passed by the shareholders at the 2016
AGM.
3.12. Public Shareholding Spread of Letshego
3.12.1. Based on the Register of Directors’ Shareholdings, Register of Substantial
Shareholders and the Share Register as at the Last Practicable Date the public
shareholding spread of Letshego was 74.59% of the stated share capital. Assuming
that the Proposed Share Buy-Back is carried out in full and Letshego Shares so
purchased are all retained, our public shareholding spread would be 64.59%
(assuming the shares are purchased from public shareholders other than our
existing Directors and Substantial Shareholders pursuant to the Proposed Share
Buy-Back).
3.12.2. The public shareholding spread of Letshego as at the Last Practicable Date was
74.59%.
3.12.3. Our Board undertakes to implement the Proposed Share Buy-Back in accordance with
laws prevailing at the time of purchase, including compliance with the twenty
percent (20%) public shareholding spread, as required under the Listing
Requirements.
3.13. Potential Advantages and Disadvantages of the Proposed Share Buy-Back, retention of
Treasury Shares and the Reduction of Capital
3.13.1. Potential Advantages
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3.13.1.1. Improves Shareholder Value-
The benefit of the Proposed Share Buy-back is that Letshego can improve
shareholder value by leveraging its balance sheet to improve returns on
equity and earnings per share.
3.13.1.2. Shareholder Perception-
The act of Letshego acquiring its own shares, retaining only five per
cent (5%) for re-issue is a signal to investors that the Company has
excess capital, which it does. This is therefore attractive to other
investors that they should invest in Letshego which could further
improve the price of the Shares.
3.13.2. Potential Disadvantages
3.13.2.1. The Proposed Share Buy-back, if implemented in full or in part, will use
some of the Company’s cash and borrowings to purchase shares rather than
to deploy the same in its operations.
3.13.2.2. Notwithstanding the above, the Board is of view that the Proposed Share
Buy-back is not expected to have any material disadvantage to the
Shareholders, as it will be implemented only after careful consideration
of the financial resources of Letshego and the resultant impact on
Letshego and the Shareholders of the Company.
4. RATIONALE FOR THE NEW PROPOSED SHARE BUY-BACK MANDATE OF LETSHEGO TO PURCHASE ITS OWN ORDINARY
SHARES OF UP TO TEN PER CENT (10%) OF THE STATED SHARE CAPITAL OF THE COMPANY AND RETAINING
THOSE SHARES AS TREASURY SHARES UP TO FIVE PER CENT (5%) OF THE STATED SHARE CAPITAL OF THE
COMPANY AND CANCELLING THE REST RESULTING IN THE SUBSEQUENT REDUCTION OF CAPITAL
The Board strives to increase Shareholders’ value. Share Buy-backs, the retention of Treasury
Shares and a Reduction of Capital are ways through which Shareholders’ value may be enhanced.
Share Buy-backs retention of Treasury Shares and the Reduction of Capital are intended to be
made as and when the Directors believe them to be of benefit to the Company and/or the
Shareholders.
5. EFFECTS OF THE PROPOSED SHARE BUY-BACK
The effects of the Propose Share Buy-Back are as follows:
5.1. Share Capital
5.1.1. Assuming the Proposed Share Buy-Back is carried out up to ten per cent (10%) of
the existing stated share capital of Letshego, the number of Letshego Shares
allowed to be purchased by the Company is 214,404,514.
5.1.2. The Company may retain up to five per cent (5%) of the stated share capital of the
Company as Treasury Shares and the rest will be cancelled to reduce the stated
share capital when the shares are cancelled after the Share Buy-back.
5.2. Cash flow
The Proposed Share Buy-Back is not expected to be implemented to the extent that it will
adversely affect the cash flow of Letshego. The exact effect on the cash flow of Letshego
will depend on the quantum and prices of Letshego Shares so purchased. Prior to executing
any Reduction of Capital, the Directors will in accordance with the Act, pass a resolution
in terms of Section 59 of the Act, confirming that, after the Reduction of Capital, the
Company will satisfy the solvency test.
5.3. Dividends
5.3.1. The Proposed Share Buy-Back is not expected to have an impact on the policy of the
Board in recommending dividends, if any, to our Shareholders.
5.3.2. The Proposed Share Buy-back may reduce the amount of distributable reserves
available for dividends. However, assuming the Proposed Share Buy-back is
implemented in full and Letshego’s quantum of dividends is maintained at
historical levels, the Proposed Share Buy-back will have the effect of increasing
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the dividend rate of Letshego as a result of the reduction in the issued and paid-
up share capital of Letshego.
5.4. Tax implications
The Proposed Share Buy-Back is not expected to have any tax implications for the Company.
6. FINANCIAL EFFECTS OF THE SHARE BUY-BACK
6.1. The financial effects of the Proposed Share Buy-back on Letshego will depend on, inter
alia, whether the Shares are purchased or acquired out of profits and/or capital of the
Company, the number of Shares purchased or acquired and the price paid for such Shares.
The financial effects on the audited financial accounts of Letshego will depend, inter
alia, on the factors set out below:
6.1.1. Purchase or Acquisition out of Profits and/or Capital
Under the Act, purchases or acquisition of Shares by the Company may be made out
of the Company’s profits and/or capital. Where the consideration paid by the
Company for the purchase or acquisition of Shares is made out of profits, such
consideration (excluding brokerage, commission, applicable vat and other related
expenses) will correspondingly reduce the amount available for the distribution of
cash dividends by the Company. Where the consideration paid by the Company for
the purchase or acquisition of Shares is made out of capital, the amount available
for the distribution of cash dividends by the Company will not be reduced.
6.1.2. Number of Shares Acquired or Purchased
Based on 2,144,045,143 issued Shares as at the Last Practicable Date, and assuming
no further Shares are issued or repurchased, on or prior to the AGM, the purchase
by the Company of up to the maximum limit of 10% of its issued Shares will result
in the purchase or acquisition of 214,404,514 Shares.
6.1.3. Maximum Price Paid for Shares Acquired or Purchased
Assuming that the Company purchases or acquires the 214,404,514 Shares at the
Maximum Price of BWP2.16 for each Share (being the price equivalent to 100% of the
average last dealt prices of the Shares for the five consecutive Market Days on
which the Shares were traded on the BSE immediately preceding the Last Practicable
Date), the maximum amount of funds required for such Share Buy-back is
approximately BWP463,113,750.24.
6.1.4 Illustrative Financial Effects
For illustrative purposes only, the financial effects of the purchase or
acquisition of Shares by the Company pursuant to the Share Buy-back Mandate on the
audited financial statements of Letshego for the financial period ended 31
December 2016 are set out below and assumes the following:
6.1.4.1 based on the issued share capital of the Company as at the Last Practicable
Date of 2,144,045,143 Shares, and assuming no further Shares are issued on
or prior to the AGM, the purchase of 10% of its issued Shares will result
in the purchase of 214,404,514 Shares;
6.1.4.2 the Company made purchases of 214,404,514 Shares at the Maximum Price of
BWP2.16 for each Share (being the price equivalent to 100% of the Average
Closing Price of the Shares for the five (5) consecutive Market Days on
which the Shares were traded on the BSE immediately preceding the Last
Practicable Date), and the maximum amount of funds required for the
purchase or acquisition of 214,404,514 Shares is approximately BWP
463,113,750.24; and
6.1.4.3 the purchase or acquisition of the Shares will be made out of the capital
and, retained earnings of the Company. The financial effects are explained
below:
Market Purchases of up to 10% at 100% of the Average Closing price:
12
Financial Position – 31 December 2016
Before After
Share Share
Buy-back Buy-back
Share Capital 875,639 412,525
Retained earnings & reserves 2,936,002 2,936,002
Non-controlling interests 192,799 192,799
TOTAL EQUITY 4,004,440 3,541,326
Other Liabilities 482,894 482,894
Borrowings 3,394,116 3,394,116
TOTAL EQUITY AND LIABILITIES 7,881,450 7,418,336
Advances to customers 6,689,740 6,689,740
Cash and cash equivalents 529,476 66,362
Other assets 662,234 662,234
TOTAL ASSETS 7,881,450 7,418,336
Number of Shares ‘000 2,144,045 1,929,641
Performance – 31 December 2016
Interest income 1,963,129 1,963,129
Interest expense (352,362) (352,362)
Net interest income 1,610,767 1,610,767
Other income 231,341 231,341
Revenue 1,845,108 1,845,108
Total expenses (897,538) (897,538)
Profit before tax 947,570 947,570
Taxation (277,836) (277,836)
Profit for the period 669,734 669,734
13
FINANCIAL RATIOS
NVA per Share BWP 3.67 BWP 3.84
Debt to Equity 85% 96%
EPS (thebe) 30.8 34.7
Assumptions
1. Share price on date of Share Buy-back BWP 2.16
2. Share Buy-back price BWP 2.16
3. 31 December 2016 number of shares and financial information used for comparability.
Number of shares was 2,134,763,925 and 2,144,045,143 at the last practicable date.
4. Share price on date of Share Buy-back – price of Last practicable date used
The financial results of Letshego Holdings Limited for the year ended 31 December 2016 were published
on 3 March 2017 and are included as an appendix to this Circular to shareholders. They are also
available on www.letshego.com
The annual report of Letshego Holdings for the year ended 31 December 2016 is available on
www.letshego.com The annual report includes the information as per Section 7.E.3 of the listing
rules and requirements of the BSE; being the income statement, the balance sheet, the cash flow
statement, any significant accounting policies or notes to the accounts, and retirement benefit
information as required by the Botswana Companies Act (CAP:01) ((as amended). The unqualified audit
opinion of the external auditors is part of the annual report for the year ended 31 December 2016.
7. EFFECTS OF THE REDUCTION OF CAPITAL
In the event that the Proposed Share Buy-back is approved by the Shareholders, the Board has
discretion to cancel all the purchased Shares which will result in Reduction of Capital or
retain those shares up to five per cent (5%) of the stated share capital of the Company as
Treasury Shares. The Board considers that the Reduction of Capital will not have any material
adverse effect on the financial position of Letshego.
8. FINANCIAL EFFECTS OF THE REDUCTION OF CAPITAL
Set out below, for illustrative purpose only, is a simplified statement showing the proposed
movement of the equity of the Company before and after the Capital Reduction, should the
Proposed Share Buy-back be implemented, based on the Company’s position as at 31 December 2016:
14
Immediately before Immediately after
the Capital Reduction the Capital Reduction
as at 31 December 2016 taking effect
BWP’000 BWP’000
Share Capital 875,639 412,525
Retained earnings & reserves 2,936,002 2,936,002
Non-controlling interests 192,799 192,799
Total equity of the company 4,004,440 3,541,326
9. NO PURCHASE DURING PRICE SENSITIVE INFORMATION DEVELOPMENTS
The Company will not undertake any Share Buy-backs at any time when it is trading under a
cautionary announcement or when it is in a normal closed period. Letshego closed period starts
on 1 July and 1 January each year and ends once the interim or year-end results are published.
10. INTERESTED PERSONS
The Company is prohibited from knowingly buying Shares on the BSE from an interested person,
that is, a Director, the chief executive of the Company or Substantial Shareholder of the
Company or any of their associates and an interested person is prohibited from knowingly selling
his Shares to the Company.
11. CONDITIONS OF THE PROPOSED SHARE BUY-BACK, RETENTION OF THE TREASURY SHARES AND SUBSEQUENT
REDUCTION OF CAPITAL
The Proposed Share Buy-Back, retention of the Treasury Shares and the Reduction of Capital is
subject to the approval of our Shareholders being obtained at the Company’s forthcoming AGM.
12. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS
Save for the inadvertent increase in the percentage shareholding and/or voting rights of the
Shareholders as a consequence of the Proposed Share Buy-Back and the subsequent Reduction of
Capital, none of our Directors and Substantial shareholders and/or persons connected to them
have any interest, direct or indirect, in the Proposed Share Buy-back and the subsequent
Reduction of Capital.
There will be no variation to the directors’ remuneration if the proposed share buy-back
mandate is approved or not by shareholders.
13. DIRECTORS’ RECOMMENDATIONS
The Directors, having considered all aspects of the Proposed Share Buy-back and the subsequent
Reduction of Capital, are of the opinion that the Proposed Share Buy-back and the subsequent
Reduction of Capital is in the best interest of the Company and will not result in the Company
being unable to pay its debts as they become due or the Company’s assets being less than their
liabilities as envisaged in Section 59 (4) of the Act. Accordingly, they recommend that you
vote in favour of the ordinary resolution for the Proposed Share Buy-Back and the special
resolution for the Reduction of Capital to be tabled at the forthcoming AGM.
14. AGM
14.1. The AGM will be held on the 24th May 2017 at the Masa Hotel, Gaborone or any adjournment
thereof, for the purpose of considering and if thought fit, passing with or without
modifications, the ordinary resolution to give effect to the Proposed Share Buy-back and
the special resolution to give effect to the Reduction of Capital.
15
14.2. If you are unable to attend the AGM in person, you are requested to complete the enclosed
Form of Proxy and forward it to our Registered Office at not late than forty eight (48)
hours before the time set for holding the meeting or any adjournment thereof. The lodging
of the Form of Proxy will not preclude you from attending and voting in person at the AGM
should you subsequently wish to do so.
15. FURTHER INFORMATION
15.1. Responsibility Statement
This Circular has been seen and approved by the Board and they collectively and
individually accept full responsibility for the accuracy of the information contained in
it and confirm to the best of their knowledge and belief, after making all reasonable
enquiries that there are no other facts the omission of which would make any statement in
this Circular misleading.
15.2. Advisors
Armstrongs Attorneys have been appointed to advise the Company and the Board for the
Proposed Share Buy-Back and the subsequent Reduction of Capital.
15.3. Material Contracts
Letshego has not entered into any material contracts (not being contracts entered into in
the ordinary course of business) within the two years prior to the date of this Circular.
15.4. Material Litigation
Letshego is not involved in any material litigation, arbitration nor is it aware of any
pending or threatened proceedings against it which may have a significant impact on the
financial position of the Company.
15.5. Solvency Test
Letshego is confident that after the Reduction of Capital pursuant to the Proposed Share
Buy-Back it would be able to meet its obligations as they become due in the normal course
of business.
15.6. Documents For Inspection
The following documents are available for inspection at our Registered Office at Plot
50371, Fairground Office Park, Gaborone, Botswana Monday to Friday (except for public
holidays) during business hours for a period between the date of this Circular to the date
of the AGM:
15.6.1. Constitution; and
15.6.2. the audited financial statements for the year ended 31 December 2016
Yours faithfully,
Enos Banda
for and on behalf of the
BOARD OF DIRECTORS
24 April 2017
Debt sponsor in South Africa
The Standard Bank of South Africa Limited, acting through its Corporate and Investment Banking
division
Sponsoring broker in Botswana
African Alliance Securities
16
Date: 25/04/2017 01:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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