CA backtracks on CEDA shares deal

Brian Benza
Staff Writer | Tuesday May 14, 2013 00:00

 

Through a venture capital fund, CEDA holds shares in the two companies. An earlier attempt to divest and sell the stakes back to the two firms had been blocked by the CA.

In a determination last December, the CA said it had blocked the transaction on public interest concerns, arguing that CEDA should sell to Batswana in the spirit of citizen empowerment. In a statement released yesterday, the CA said following an appeal by the two firms, a compromise has been reached and CEDA can now sell the shares directly to AON and Bomaid.

'The authority had in December 2012 rejected the merger notifications brought by AON and BOMAID citing public interest concerns and directed that in each of the transaction if any party wanted to sell shares held by CEDA Venture Capital they should sell to citizens that are not part of the current shareholding to broaden citizen empowerment.

A new mutual settlement has now been agreed and as signed by the authority and each party, a condition that in the event either Aon Holdings or Bomaid disposes of shares acquired from CEDA Venture Capital Fund when it exits its investment, both parties should offer those shares first to a Motswana partner or partners. The transactions as notified by the parties have, after the signing of the settlement agreements, been implemented,' said CA communications and advocacy director Gideon Nkala.

The mutual settlement means the matter will no longer come before the Competition Commission for adjudication. CEDA is divesting out of the two companies as part of a process of winding up its P200 million venture capital fund.

In 2007, Aon entered into a deal in which it transferred 25 percent of its shares worth P25 million to the CEDA Venture Capital Fund in a move aimed at boosting citizen participation in the firm.  The P200 million CEDA Venture Capital Fund was set up in 2003 and Venture Partners Botswana (VPB) was appointed as its fund managers. The transaction had then put 30 percent of the company shareholding into the hands of citizens as employees of Aon already hold five percent in the company, acquired in 2004.