Botswana’s second-largest retail outfit, Sefalana Holding Company Limited Group, has sealed a deal that will see it investing about P74 million into Australian company, Seasons Group. Sefalana Group has entered into an agreement to purchase 40% of the share capital in Seasons Group. The Australian-based company operates in the Fast Moving Consumer Goods (FMCG) sector and operates a chain of seven supermarkets in Brisbane.
“A cautionary announcement and subsequent updates were issued since 28 October 2019, whereby Shareholders of Sefalana Holding Limited were advised that the Company has entered into negotiations with a third party outside Botswana, which if successfully concluded, and subject to relevant regulatory approval, will result in a transaction that might have an impact on the price of the Company’s shares,” wrote Mohamed Osman, the Group’s Finance Director, in a note to shareholders.
Osman noted that the group entered into an agreement to purchase shares in Seasons Groups last month (April). He said the business (Seasons Group) is controlled by a consortium of shareholders, many of whom are also consortium members in the South African business in which Sefalana has a preference share interest. According to Osman, the total purchase consideration for Sefalana’s investment in Seasons Group amounts to AUD 9.9 million (P74 million) and is considered as its fair value.
“The effective date of investment is expected to be 8 May 2020. All relevant regulatory approvals have been obtained. This investment will be treated as an investment in an associate, in which Sefalana exerts significant influence, and therefore will be equity accounted,” Osman stated. He said Sefalana entered into the agreement with Seasons Group in order to pursue its Group strategy to diversify its income stream and foreign exchange exposure.
The company’s investment in Australia is a testimony that the company is growing significantly. They first operated outside Botswana in 2014 when they extended their business into neighbouring Namibia opening their first store in Katima Mulilo in January 2014. In July 2014, Sefalana purchased the Metro Group (still in Namibia) of 12 stores.
In November 2015, it took over an additional store in Swakopmund, Namibia, bringing its total store compliment to 14. According to the company’s website, Sefalana is still in constant lookout in Namibia as it works towards its medium-term target of 20 stores across in Namibia.
On top of the Namibian market, the company spread its investment wings to Lesotho in 2016 through a takeover of the country’s largest distribution and logistics company, TFS Wholesalers, Distribution and Logistics in Maseru. Sefalana has a total of 74 stores across three countries along with three motor dealerships (MAN, TATA and Honda).