South Africa's Basil Read to sell shareholding in Botswana joint venture

As the company continues with its business rescue process.

South Africa’s construction group Basil Read, which is in the process of business rescue, plans to sell a 28 percent shareholding in the Majwe Mining joint venture owned by its wholly owned subsidiary Basil Read Mining Botswana for R110.5 million.

The company has agreed to sell its shareholding in the Majwe Mining joint venture to Thiess Botswana and Bothakga Burrow Botswana.

Out of the 28 percent stake, Thiess will buy ten ordinary shares and Bothakga will buy 18 ordinary shares, constituting 10 percent and 18 percent of the issued shares of Majwe, respectively.

The Majwe Mining joint venture has been profitable for Basil Read.

The total unadjusted net profit after tax of the Majwe joint venture for the 12 months to December was about R130 million, with Basil Read Mining Botswana’s 28 percent share worth about R36.4 million.

Basil Read is of the view that the Majwe joint venture shareholding is a non-core asset, the company said.

“In our view, the required capital outlay can be used far more beneficially by funding the required plant and equipment replacements to pursue other opportunities for our mining business both in Botswana and elsewhere,” the company said in a statement.

The transaction, once finalised, would be the first of several non-core-asset disposals envisaged in Basil Read’s business rescue plan.

Basil Read said the proceeds of the sale will be used as working capital for the mining business, with excess funds provided to the group as post-business rescue commencement funding to assist the business rescue process.