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