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Home Business

Why Furnmart is pulling out

patriot by patriot
January 17, 2021
in Business
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Why Furnmart is pulling out
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Furnmart has revealed factors behind its delisting and what the future holds for its shareholders.

 “We listed on the BSE to raise capital for a regional thrust in key markets being Botswana, Namibia and South Africa. The strategic intent was to expand from home markets to the rest of Africa. Over the course of the last six years our stock has been illiquid in the market with trade of our shares being less than 3% of those in issue. This to some extent has inhibited our market capitalisation,” said Tobias Mynhardt, Deputy Chairman of Furnmart.

Responding to questions about the delisting, Mynhardt emphasised the company felt that with the new BSE rules set to come into effect in January 2019, Furnmart would not meet free float regulations and would therefore be in breach of BSE rules.

“The credit furniture retail business has been in turmoil over the past decade with well-known regional competitors either closing down or reducing the number of stores. The business model has been under severe pressure in challenging regulatory environments and attempts by Furnmart to diversify both regionally and in terms of the business model have not yielded the growth opportunities that we have been looking for. This lack of opportunities for growth together with limited demand for our shares means that there is no longer the requirement to raise capital, even if we could, and therefore there are no real benefits to the company to being listed. So with the new BSE regulations which mean that we will no longer be able to meet the requirements in 2019, delisting is a natural and obvious step for the company,” he said.

With expertise of over two decades in the local bourse, the Furnmart board took this decision in consultation with the BSE and with its approval. “The decision was taken with due recognition of all stakeholders and we can confirm that delisting will not in any way affect the jobs of our staff,” he said.

He said shareholders are free to trade their stock on the BSE between now and the planned delisting in January whilst those who wish to continue as shareholders in an unlisted entity may also do so.

“In terms of BSE listing rules, investors have to be offered an exit mechanism for those who do not wish to hold unlisted shares. As such, Furnmart itself is offering to buy those that up until now have not been able to sell their shares. This gives many of our shareholders an opportunity to exit at a price 20% higher than where the share has been trading for more than a year. Those that want to trade post delisting will use different investor criteria for evaluation and negotiation and would need to consider tax and other investment aspects of unlisted equities. Delisting does not mean letting go of governance as the board and its committees will remain intact and our auditors will continue with our books post listing. Apart from not being listed on the BSE, business will continue as normal.”

Furnmart will hold an EGM in December for deliberations with its shareholders.

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  • TDR 1000 returns February 3, 2023
    The Dakar Rally, considered as one of the toughest in many years, is now something of the past and South African Rally-Raid competitors proved their talent while local race vehicle manufacturers and constructors showed their worth and returned from […]
  • Orange splashes P15.4m on FA CupFebruary 3, 2023
    NANCY RAMOKHUA editors@thepatriot.co.bw Orange Botswana through the Orange FA Cup has renewed its sponsorship with Botswana Football Association (BFA) for an additional three seasons valued at P5 138 000 00, an investment increase of 17%. The renewed collaboration will […]
  • Sefalana posts P4.9 billion revenueFebruary 2, 2023
    BAKANG TIRO editors@thepatriot.co.bw Diversified retail giant Sefalana has posted impressive set of results for the half year period ended 30 October, with the company recording P4.5 billion in total revenue. Botswana Stock Exchange (BSE) listed home grown retailer released […]
  • BSB lists P1 billion bondFebruary 2, 2023
    NANCY RAMOKHUA editors@thepatriot.co.bw Botswana Savings Bank (BSB) has listed a bond worth P1 billion with the Botswana Stock Exchange (BSE). The bond note programme will give BSB access to capital and provide alternative funding, reducing dependency on short- term […]
  • Botswana, OPEC seal P1.2 billion loan dealFebruary 2, 2023
    BAKANG TIRO editors@thepatriot.co.bw The Minister of Finance Peggy Serame is highly confident that the P1.2 billion loan that Botswana has secured from the Organisation of Petroleum Exporting Countries Fund for the International Development Fund (OPEC) will boost the country’s […]
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