BUILD­ING BLACK BUSINESS

Finweek English Edition - - FRONT PAGE -

It ’s been a busy time for Phuti Ma­hanyele, CEO of Cy ri l Ramaphosa’s Shan­duka Group, which is in the f inal stages of a t i e- up wit h Phuthuma Nh­leko’s in­vest­ment f irm Pem­bani.

In- bet ween f i nal­is­ing t he deal, which is ear­marked for com­ple­tion by year end, the group cel­e­brated the 10th an­niver­sary of t he Shan­duka Foun­da­tion, which has adopted 613 schools and ben­e­fit­ted nearly 700 000 learn­ers. Ma­hanyele was also named ForbesWo­man Africa’s Business Leader of the Year, a fit­ting trib­ute to cel­e­brate her own decade at Shan­duka.

While mum on any de­tails of the Shan­duka/ Pem­bani deal and whether there may be as­set re­struc­tur­ing and/ or a list­ing in the pipe­line, Ma­hanyele said Shan­duka’s fo­cus will re­main on iden­tif ying growth op­por­tu­ni­ties, largely on the rest of the con­ti­nent.

“For a company of our size, we wouldn’t t y pi­cally be look­ing at a BEE trans­ac­tion as such. We’re now look­ing for growth in par­tic­u­lar sec­tors with par­tic­u­lar en­ti­ties that we want to part­ner with. From that per­spec­tive, one is able to look at trans­ac­tions that are not only in SA but are in any part of the African con­ti­nent, and look­ing at f inanciers that are not nec­es­sar­ily South African but from other parts of the world,” Ma­hanyele said.

Shan­duka, which was founded by Ramaphosa on 2001 to host his BEE in­ter­ests, cur­rently holds stakes in a wide range of com­pa­nies and sec­tors, in­clud­ing Stan­dard Bank, Alexan­der Forbes, MTN, Lon­min, t he lo­cal McDon­ald’s fran­chise and a Coca Cola bot­tling plant, and op­er­ates coal mines in ven­tures with Glen­core.

Its i nter­ests out­side SA i nclude a 30% stake in the Ag­greko power ven­ture i n Mozam­bique, prop­ert y in Ghana and a 9.2% stake in He­lios

THE COM­BINED GROUP WILL BE ONE OF THE BIG­GEST EM­POW­ER­MENT FIRMS IN THE COUN­TRY WORTH MORE THAN R13.5BN.

Tow­ers Nige­ria.

The dea l wit h Pem­bani wi l l al­low Ramaphosa to exit his stakes in lo­cal reg­u­lated busi­nesses, such as f i nan­cial ser v ices, min­ing and telecom­mu­ni­ca­tions, which may lead to a con­flict of in­ter­est with his day job as the coun­try’s deputy pres­i­dent.

Pem­bani, wi t h f or mer Absa ex­ec­u­tive Kennedy Bun­gane as CEO, holds i nvest­ments i n com­pa­nies i nc l ud­ing En­gen, BHP Bi ll i t on En­ergy Coal South Africa, Exxaro and Afrisam. It also op­er­ates an African i nfras­truc­ture f und i n part­ner­ship with Jo­hann Ru­pert’s Remgro. The com­bined group will be one of the big­gest em­pow­er­ment f i rms in the coun­try worth more than R13.5bn.

Ajay Lalu, man­ag­ing di­rec­tor of black lite con­sult­ing, said con­sol­i­da­tion in the em­pow­er­ment space should be wel­comed, with a re­struc­tur­ing of as­sets fol­low­ing the tie-up l ikely to follow.

“There will be ar­eas where there may be conf licts and other ar­eas where great syn­er­gies be­tween the two sets of as­sets can be un­locked. The in­ter­est­ing thing for me is the emer­gence of large em­pow­er­ment play­ers with strong bal­ance sheets, where they can look at as­sets on a port­fo­lio ba­sis rather than try­ing to be ev­ery­thing to ev­ery­one.”

The merger of Kag­iso Tr ust In­vest­ments and Tiso Group in 2011, for ex­am­ple, has en­abled the com­bined group, now known as Kag­iso Tiso Hold­ings, to pur­sue big­ger and more at­trac­tive op­por­tu­ni­ties. The group made its f irst in­vest­ment out­side SA in Fe­bru­ary when it bought a mi­nor­ity stake in Ghana’s Fidelity Bank.

While ma­jor em­pow­er­ment deals with big listed com­pa­nies in SA are be­com­ing harder to come by and with ac­cess to black cap­i­tal re­main­ing a chal­lenge, Ma­hanyele be­lieves there are still op­por­tu­ni­ties for big, black­owned busi­nesses to be formed.

The newly pro­mul­gated em­pow­er­ment l eg­is­lat i on place a big­ger fo­cus on own­er­ship, which is “very pos­i­tive”, she said. “It will cre­ate more op­por­tu­ni­ties for more black share­hold­ers to come into busi­nesses in SA.”

How­ever, ac­cess to cap­i­tal re­mains an is­sue, and banks will look “more con­ser­va­tively at how they f inance var­i­ous trans­ac­tions” given the dif­fi­cult eco­nomic con­di­tions in SA, she said.

“Un­for­tu­nately, we are no longer i n t he hey­day where t rans­ac­tions could be done quite eas­ily be­cause the pa­ram­e­ters have re­ally changed. But not with­stand­ing that, we know that we need to do th­ese trans­ac­tions – I guess it ’s an is­sue for trans­ac­tors to look at the best ways to f inance th­ese trans­ac­tions.”

There is in­creased in­ter­est from in­ter­na­tional f inanciers and pri­vate eq­uit y play­ers who want ex­po­sure to Africa’s growth po­ten­tial, which cre­ates op­por­tu­ni­ties for South African busi­nesses, Ma­hanyele said. “You can present an op­por­tu­nity to in­ter­na­tional in­vestors that not only present South Africa n op­por t unit ie s , but al s o op­por­tu­ni­ties around the con­ti­nent.”

After 10 years at Shan­duka – she joined in 2004 as man­ag­ing di­rec­tor of Shan­duka En­ergy fol­low­ing a stint at the De­vel­op­ment Bank of South­ern Africa as head of project f inance – she hasn’t given much t hought of what her own fu­ture holds. “I be­lieve we’ve been very for­tu­nate to be in this or­gan­i­sa­tion. [ The founders weren’t] just about cre­at­ing a business, but it was about mak­ing a dif­fer­ence in our coun­try.”

ed­i­to­rial@fin­week.co.za

PHUTI MA­HANYELE: “SA CAN GROW BIG­GER BLACK COM­PA­NIES THAN SHAN­DUKA”

Phuti Ma­hanyele

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