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Botswana has hired Lazard as it looks to take control of diamond miner De Beers, days after the country received a $12bn investment pledge from Qatar.
The southern African nation’s government told the Financial Times it had appointed the French investment bank as co-adviser, alongside Swiss boutique lender CBH Compagnie Bancaire Helvétique, regarding “the potential acquisition of all or part of the De Beers Group”.
Lazard has a history of advising governments on complex financial situations. It has also worked on large mining deals including BHP’s attempted takeover last year of Anglo American — which owns the 85 per cent of De Beers not held by Botswana, where most of the company’s diamonds are sourced.
The appointment of CBH, first reported by the FT in July, raised eyebrows inside the Botswana government as well as among bankers in London, where the private wealth management specialist is relatively unknown in mining M&A circles.
Last month, Botswana’s mining minister Bogolo Kenewendo told the FT that the country wanted to take a controlling stake, while President Duma Boko alleged in a speech that De Beers was “not doing its job” and suggested the government should “take over”.
Anglo American, which is seeking to sell its De Beers stake as part of a broader corporate overhaul, received about nine indications of interest in first-round bids this month, according to people familiar with the process. Botswana has the right to match any third-party offer.
A deep downturn in the global diamond industry has complicated the De Beers sale process and hit the economy of Botswana, which relies on the sector for about a quarter of its GDP.
Although the book value of De Beers is listed as about $4.9bn in Anglo’s accounts, bankers expect bids to come in far lower than that because of the market downturn.
Botswana last week struck a $12bn investment deal with Qatar’s Al Mansour Holdings, which has committed to investing in a range of sectors, from mining and tourism to agriculture, and could potentially help finance a De Beers deal.
Several people close to the talks with Botswana and the De Beers sale process expressed puzzlement over the involvement of CBH, which is not known to have had major mining M&A roles previously.
CBH director Sherzod Yusupov, an Uzbek-born banker who is working on the Botswana account, was previously a senior vice-president at UniCredit and a board member at Moscow-based Uniastrum Bank.
From 2019 to 2021, he was involved in a high-profile corporate dispute at Vostochny Bank, which roiled the Russian business community and led to the brief jailing of US private equity investor Michael Calvey.
A representative of CBH said in a statement: “All court cases with [Yusupov’s] involvement were amicably settled and discontinued in their entirety.”
A lawyer for Yusupov said his “position with respect to the dispute was ultimately vindicated, with any negative allegations made against him or parties related to him either withdrawn or abandoned”.
Geneva-based CBH, majority-owned by the Benhamou family, provides private wealth management services and has about $20bn of assets under management. CBH said in a statement that it had “extensive experience” in M&A and in mining transactions, without citing specific roles.
Although the firm normally maintains a low profile, Swiss financial regulator Finma took action against CBH in 2021 for breaching anti-money laundering and risk management obligations. That enforcement, which stemmed from a wider investigation by Finma into banks’ links with Venezuelan oil company PDVSA, required CBH to end all ties to Venezuelan clients.
The action did not include any financial penalties against the bank. “Any organisational weaknesses mentioned by Finma relate to documentary issues from relationships acquired between 2011-2014,” said CBH.
The government of Botswana said in a statement that its advisers had been selected following a “structured and rigorous due diligence process, which carefully assessed each firm’s international experience, reputation, team and execution capacity, regulatory compliance, fee structure, alignment of interests, and overall strength fit”.
Anglo American and Lazard declined to comment.
Additional reporting by Arash Massoudi, Joseph Cotterill and Ivan Levingston
https://www.ft.com/content/2b1b2f0f-5b9d-4119-a330-ff5de3a0ba6c
