BDC sees its acquisition of Lobatse-based automotive parts company as one that will elevate Botswana’s appeal as an investment destination
TLOTLO KEBINAKGABO
The Competition and Consumer Authority (CCA) has unconditionally approved the acquisition of 60 percent shareholding in Pasdec Automotive Technologies Botswana (Pty) Ltd by the government’s investment arm, Botswana Development Corporation (BDC).
Based in Lobatse, Pasdec Botswana manufactures and supplies automotive wiring harnesses for globally leading vehicle brands like Nissan and Volkswagen. The company relocated from South Africa to Botswana in 2015 in a move that was completed in June 2017 and cost P200 million. The company’s commissioning later saw BDC signing a deal to take a stake valued at P52.1 million in the subsidiary while also agreeing to increase its stake in the future.
Media reports say the Pasdec deal was sealed after high level diplomacy involving trips to Malaysia by former trade minister Vincent Seretse and President Mokgweetsi Masisi when he was vice president. The company soon became BDC’s flagship project after a period of turbulence at the government’s investment agency. Several years later, BDC has now increased its stake in Pasdec.
“Pursuant to the provision of Section 53 of the Competition Act of 2018, the Authority has unconditionally approved the proposed acquisition of 60 percent shareholding in Pasdec Automotive Technologies Botswana (Pty) Ltd by Botswana Development Corporation,” reads a statement signed by the CEO of the Competition and Consumer Authority, Tebelelo Pule. “However, as stated under Section 61of the Act, this approval does not override or negate any other mandatory statutory approvals or processes that any of the parties to this merger must comply with under the laws of Botswana.”
According to CCA, the proposed transaction between Pasdec and BDC is not likely to result in the prevention or substantial lessening of competition or endanger the continuity of the services offered in the relevant market. “Furthermore, no public interest concerns have been identified,” CCA stated.
Established in 1970 under the Companies Act, BDC is a company limited by shares and owned by the Government of Botswana. It is mandated to drive industrialisation of the country by providing financial assistance to investors with commercially viable projects. BDC provides both debt and equity financing to commercially viable projects that aim to pioneer new industries, unlock value in existing industries and create significant employment.
BDC is of the view that Pasdec will come in handy in ensuring that the government’s investment arm drives its mandate. “The corporation is taking a long-term strategic view of the business with the equity investment which will see it strengthen its balance sheet and position it for growth,” BDC said in a recent statement. “Pasdec has potential for further growth, contributing towards economic activity, export promotion and job creation for locals. Its success will also further make Botswana an attractive investment destination.”
Meanwhile, Pasdec Botswana is wholly controlled by Pasdec Resources SA Ltd, a South African-based company, which is in turn controlled by Pahang Off-Shore (Sdn) Bhd, a Malaysian registered company. Pahang is controlled by Pasdec Holdings Berhada, a company listed on the main board of the Bursa Malaysia Securities Berhad.
Pasdec Botswana has a manufacturing plant in Lobatse. The plant’s capacities are customized to accommodate both high volume production lines and lesser volume jobbing shop-type orders. The 20 000m2 plant is designed for current demand and future growth opportunities.