Botswana-based pan-African microfinancier Letshego has announced plans to secure a P500 million loan facility from its largest shareholder, the Botswana Public Officers Pension Fund (BPOPF).
The funding will be used to address ongoing liquidity challenges stemming from macroeconomic headwinds and internal operational hurdles.
Last month, Letshego also announced that it received a total of P249.1 million from BPOPF over four tranches between March and June 2025, and an additional P24 million from BIHL in March 2025.
The proposed P500 million loan, structured as an 18-month bridge facility, is subject to shareholder approval and will be tabled at an Extraordinary General Meeting (EGM) scheduled for 13 August 2025.
The funding is expected to ease immediate liquidity constraints caused by a combination of weak performance in the domestic diamond market, depressed bond market liquidity, delayed remittances from subsidiaries, and reduced dividend inflows following negative financial performance in 2023 and 2024.
The loan terms include market-related pricing, key performance covenants, and repayment triggers in the event of illegality, sanctions, or change in control. The company is also permitted to make voluntary prepayments and is required to partially repay the facility by June 2026, with full settlement due at maturity.
Letshego emphasized that the loan will not increase its debt-to-equity ratio, as the funds will be used to refinance existing obligations. An independent fairness opinion by Baker Tilly Botswana concluded that the loan terms are fair and reasonable and align with market norms.
To strengthen its financial position, the company is simultaneously pursuing long-term capitalisation strategies, including potential restructuring of its East and West African operations, dividend repatriation efforts, and continued cost rationalisation measures.
The board has endorsed the transaction, except for Director Tebogo Tomango, who recused herself due to a conflict of interest arising from her ties to BPOPF. The board confirmed that the company remains solvent and is confident the funding will support a sustainable recovery.
Letshego operates in 11 African countries, with total assets amounting to P18.7 billion as at 30 June 2025. Of this, 24% is based in Botswana, with the remainder spread across Namibia, Mozambique, Ghana, and other markets in East and Southern Africa.