Telkom’s Mabuza buys slice of Sphere

NEW CHAIRMAN: Jabu Mabuza BUSINESS tycoon Jabu Mabuza has bought a 10% stake in blackcontrolled investment company Sphere Holdings and the chairman’s seat for an undisclosed amount.

Itulemeng Kgaboesele, cofounder and CEO of Sphere, said Mabuza “paid a fair value for a good business”, but he declined to disclose the amount.

Discussion on a partnership between Mabuza and Kgaboesele has been off and on since 1999, when the two struck up a friendship. Kgaboesele was an investment banker at Merrill Lynch, advising South African Breweries on a transaction with Tsogo Sun, where Mabuza was an executive director.

The new role will add to Mabuza’s workload. He is chairman of Telkom and president of Business Unity South Africa.

Mabuza will help start a new chapter for Sphere, which intends to take on more meaningful majority stakes in the mediumsized companies in which it invests as well as develop more influential minority positions in larger businesses.

The 85%-black-owned business plans to raise between R500-million and R1-billion in new capital through institutional investors.

When quizzed whether that sum was enough — especially in the current global economic environment — Kgaboesele said it was a “start” and would be in addition to the company’s “meaningful” balance sheet.

The interests of the company, founded in 2003, include industrial goods and services firms Babcock Engineering, Babcock Target Plant Services, Pandrol and Honeywell.

In 2003, it successfully raised R300-million for its Sphere I Fund. Sphere specialises in enterprises with a value of between R50-million and R200-million.

Kgaboesele said the group would remain focused on industrial, business-to-business services and manufacturing.