(MENAFN- The Post) 'If you want to go fast, go alone. If you want to go far, go together,' says an African proverb that speaks to the potent power of collaboration.
The adage aptly captures the story of Sekhametsi Investment Consortium (SMIC) from its humble beginnings in 1999 to now. It's a story of how Basotho of modest means pulled together their meagre resources to build a formidable investment consortium that is now the biggest locally owned company in Lesotho. This is a compelling tale of shared vision, passion and perseverance.
For the SMIC shareholders the past two decades have been a journey of huge hurdles surmounted, gratification delayed, mission accomplished through hard work and commitment to playing by the rule book.
They have patiently nurtured a seed that has now matured and is poised to become a forest. Today SMIC is worth a staggering M1.1 billion, with interests in telecommunications, banking, property and textile manufacturing.
All of which were borne out of one moment of inspired thinking by a few dozens of Basotho who dared to dream big and toiled over the years to make that dream a reality.
SMIC has its roots in the late 1990s, when the Government of Lesotho embarked on a Privatisation Programme that saw the state selling off its stakes in various companies.The government's 12 percent stake (with an option to buy further 8%) in Vodacom Lesotho was one of the assets on sale.
At that time Vodacom Lesotho was a small mobile network operator with just about 19 000 subscribers most of whom were based in Maseru. Mobile phones were still a preserve of a few and considered a fad that would soon disappear. Lesotho's only fixed line company (LTC) by comparison had 21000 subscribers. Palo Kotelo, one of SMIC's founding directors and a representative of one of the corporate shareholders, recalls how the prospects of owning a stake in Vodacom 'lit a fire' in him.
'I instantly knew that the telecommunications sector was the future,' says Kotelo, a retired banker who studied economics and finance. Kotelo admits that he and others who saw the sector's potential were not thinking about broadband and social media which have since become the mainstays of the telecommunications sector. 'I just thought this would allow Basotho farmers to communicate with their herd boys in the mountains,' he says.
He envisaged a future in which remote rural communities would be able to make a call to their relatives in Maseru about news of an assortment of activities. Kotelo says I saw the future at that simple and rudimental level.' He says; 'Now I see I underestimated the potential.'
It was not long before he was meeting colleagues, friends, relatives and former classmates who also had their eyes on the shares. And thus began the long brainstorming meetings to plot how to get their hands on the Vodacom Lesotho shares, something many of his contemporaries thought was a pipedream.
In the first few meetings there were around 30 individuals who were almost entirely working men and women without access to millions in the bank or access to credit lines. None had savings that could help them achieve the dream they coveted.
Kotelo says 'I suggested a name for our grouping to my colleagues, because I thought in years to come water would be a very expensive and scarce commodity. I thought the metaphor that talks to security of means in one's old age was relevant.' That explains the name ' Sekhametsi ' which colloquially means the one who draws water.
News of the SMIC project spread, mostly through 'word of mouth' by those sold on the idea. From the initial 30 the group grew to 200 individuals and investment clubs. Sekhametsi submitted a formal offer to the government's Privatisation Unit, who selected it as the preferred bidder ahead of two other competitors.
'In determining the value of the Government's 12 percent stake in Vodacom Lesotho, Sekhametsi group had turned to accountants, investment experts and business managers within its ranks', recalls Kotelo. The experts valued the shares at M5.4 million which was the exact price the government accepted for the shares. This eye-watering figure was clearly beyond the group's means, but they were undeterred.
Once selected as the preferred buyer SMIC members began scurrying around to raise the M5.4 million. They embarked on a public campaign to recruit members through newspapers, radio, and direct approach to people they knew. Many SMIC members tell stories of how friends and relatives warned them against investing in the consortium. In the end they managed to raise M2.8 million, which was half of what was required.
The solution came from RockIT, a South African venture capital firm that agreed to invest the remainder in exchange for the other six percent in a strategic partnership with SMIC, in a special purpose company called Sekhametsi Enterprises. That partnership would last until 2006 (5 Years) when RockIT announced its intention to exit the Vodacom Lesotho Deal.
RockIT was asking for M16 million (for an initial investment of M2.8 million some five years previously), which Kotelo says Sekhametsi did not have. A local bank provided the capital to buy the shares that effectively increased the consortium's stake in Vodacom Lesotho to 12 percent. But within the group some were getting frustrated by the lack of dividends. Some investors began selling their shares.
In 2009, while still paying off the loan for the RockIT stake, Sekhametsi approached Vodacom Group for the purchase of an additional eight percent stake in Vodacom Lesotho, which would push their shareholding to 20 percent and give them the company's chairmanship. The price of that eight percent stake was a whopping M90 million. As much as the figure was shocking to Kotelo and other shareholders, it revealed the massive growth of their investment in Vodacom Lesotho.
Kotelo says: 'In 2009 we knew that the growth in value in VCL was exponential, therefore, we could not pass on the opportunity to increase our shareholding.' To achieve this latest acquisition SMIC borrowed from another local bank. Around the same time the consortium began diversifying the investment portfolio.
Now, 20 years after its formation, through a purchase of a minority stake in the Telecommunications Sector, the consortium boasts interests in property, financial services, and textile manufacturing.
The mission, Kotelo says, is to be the best investment group in both management and growth. He says what has carried the group this far is the commitment to transparency and corporate governance rules.
The growth continues and so does the amazing story of SMIC.
The story continues … .
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