- LLR acquires additional shareholding in JTTM, making it a subsidiary
- Company takes over property management services for JTTM
- Agreement deemed fair and reasonable for Unit holders by Audit Committee
Harare- Letlole La Rona Limited (LLR) has announced its successful acquisition of an additional 25% shareholding in JTTM from Botswana Railways Organisation (BRO). This move has resulted in JTTM becoming a subsidiary of LLR, with the company now holding a majority stake of 57.79% in JTTM.
The negotiations for the acquisition have been concluded and all conditions precedent (CPs) related to the Sale of Linked Units Agreement have been finalized. This includes the approval of the transaction by the Competition and Consumer Authority.
In addition to this acquisition, LLR has also entered into a Property Management Agreement with JTTM for the oversight and management of JTTM's immovable property at Plot 4716, Gaborone (Rail Park Mall). This agreement will see LLR taking over property management services from Khumo Property Asset Management with effect from 16 November 2023.
The terms of the Agreement have been reviewed by LLR's Audit, Risk and Compliance Committee, which has determined them to be fair and reasonable for the company's Unitholders. A fairness opinion from the Audit Committee will also be available for inspection at the company's registered office for a period of 28 days from the date of this announcement.
As JTTM will now be a subsidiary of LLR, the conclusion of the Agreement has been categorized as a small related party transaction in accordance with Section 7.2 (b) of the Botswana Stock Exchange Equity Listing Requirements.
The Agreement, which has a total consideration of P15.03 million for an initial period of 5 years, will see LLR acting as the Property Manager and receiving a management fee of 3.5% on the total monthly collections with an annual escalation of 6.5%. There are no put, call, or other options related to the Agreement, and no service contracts of the existing directors are connected to it.
The rationale for this acquisition and agreement is to further strengthen LLR's position as a listed variable rate loan stock company. With a current portfolio valued at P1.425 billion, managing JTTM in-house will directly benefit the shareholders of LLR by increasing revenue from property management services.
Unitholders will not be required to vote on or approve the Agreement, as confirmed by LLR in accordance with Section 7.6 of the Botswana Stock Exchange Listings Requirements. This announcement is for information purposes only, and Unitholders are encouraged to inspect the fairness opinion at the company's registered office.
In conclusion, the acquisition of additional shareholding in JTTM and the takeover of property management services by LLR is a strategic move that will have a positive impact on the company's growth and benefit its Unitholders.
Equity Axis News
