The government of the southern African nation of Botswana decided not to take advantage of its legal right to purchase additional shares of the diamond company De Beers in order to remain committed to its intention to balance the national budget, Diamond News reported.
The corporate exit of the Oppenheimer family and the sale of their shares in De Beers to Anglo American gave the Botswana government a pre-emptive right to increase its stake in the firm, which currently stands at 15% of the total. If Botswana had availed itself of the opportunity, it would have split the Oppenheimers' 40% stake with Anglo at a 1 to 3 ratio, increasing its own share to 25%. Instead, Anglo will purchase the whole 40%, giving it a total of 85%.
The government of Botswana explained that the price tag for the 10% it could have purchased was $1.275 billion, a figure that amounts to about 10% of the Gross Domestic Product of the entire country. It said that further debt would prevent it from reaching its goal of balancing the national budge within 18 months, according to Diamond News.