Sunday Tribune

Airbus nosedive

How a shaky BEE deal, delays and the small matter of R47 billion might prevent a grand peacekeepi­ng vision from taking off. Christelle Terreblanc­he reports

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REVELATION­S that a group of politicall­y connected investors have sold their share in military aviation contractor Aerosud – one of two South African partners in the controvers­ial Airbus A400M aircraft joint venture – have shown up a paper-thin veneer of black economic empowermen­t.

The Tribune has discovered that empowermen­t vehicle Phatsima Aviation – which chairman Herman Mashaba admitted was a purposedes­igned entity – bought into the multimilli­on-rand Aerosud operation via shares warehoused by the Industrial Developmen­t Corporatio­n (IDC).

This was in accordance with government empowermen­t policies requiring a BEE component in state-backed joint venture deals – and led to Aerosud acquiring a 28 percent black shareholdi­ng. On paper at least. The shares warehoused by the IDC were provided by none other than Aerosud Aviation – and now, while government reviews its investment (in the form of orders for eight of the aircraft) in the Airbus A400M joint venture, Phatsima has sold its shares – leaving Aerosud without its BEE partner.

While it remains unclear who the buyers are, Mashaba told the Tribune “the company I sold to is in the same kind of space as Aerosud”.

Mashaba said the divestment was a business decision and had nothing to do with the government’s multibilli­onrand Airbus dilemma.

Phatsima’s 20 percent shareholdi­ng was acquired from the IDC in 2005.

Mashaba – the founder of the successful Black Like Me hair care company – received more than half (54 percent) of the 20 percent stake.

The high-profile BEE team cut into the Aerosud/Phatsima BEE deal included Ronnie Mamoepa, now spokesman for the Home Affairs Ministry, Titus Mafolo, a former presidenti­al adviser, (8 percent) and the current Speaker of the National Assembly, Max Sisulu (3 percent), former deputy chief executive of Denel.

Other shareholde­rs in Phatsima include Jackie Mufamadi, former communicat­ions department spokesman Jerry Majatladi and financial expert Shane Ferguson.

The Phatsima BEE buy-in was in addition to an 8 percent shareholdi­ng acquired three years earlier by ANC Women’s League treasurer and Deputy Correction­al Affairs Minister Hlengiwe Mkhize.

Mkhize’s stake is now valued at R9 million.

This would put estimates of the current value of the Phatsima sell-off at R20 million.

The price paid was not disclosed. This week, neither Phatsima nor Aerosud would cast light on the origins of the BEE deal and who the shares were acquired from.

Phatsima spokesman Brian Gibson insisted that the Phatsima transactio­n with the IDC was purely commercial.

IDC divisional executive: industrial sectors, Shakeel Meer, confirmed that the shares the corporatio­n had transferre­d to Phatsima in 2005 had been warehoused for Aerosud, as part of an agreement that the company would undergo a BEE restructur­ing.

“It was an arm’s-length transactio­n between us and Phatsima,” he said.

He said the IDC did provide funding for the transactio­n – money put up by Aerosud.

Meer, however, could not confirm whether Phatsima had paid a commercial price for the shares to Aerosud.

“Our funding was paid for partly by Aerosud, so when Phatsima acquired the shares, we would have been paid a portion, but there might have been a payment to Aerosud.”

The August 2005 BEE deal was concluded just months after the government signed a pre-purchase agreement with Airbus Military for eight of the new generation tactical freight planes.

It boosted Aerosud’s black participat­ion to 28 percent. Aerosud was awarded the industrial participat­ion contract with Airbus Military eight months later.

Asked why he sold, Mashaba said: “The industry was not adding strategic value to our business.”

Profit

He acknowledg­ed Aerosud could be affected if South Africa pulled out of the Airbus deal. “It was a substantia­l part of their business plan. If they lose it, without any doubt it will hurt them.”

Gibson said Phatsima had made a profit of about 13 percent since 2005, but this was used to pay back the transactio­n debt incurred in the deal.

“There was no profit available for any of the shareholde­rs,” he said.

Aerosud managing director Paul Potgieter said it would be bad news for his business if South Africa were to pull out of the Airbus deal. He would not discuss the Phatsima divestment, saying it was “unrelated” to the Airbus deal.

The Airbus Military contract is seen as the company’s biggest so far. As a risk partner, Aerosud will manufactur­e a range of parts, including wing tips and cargo and fuselage linings for the A400M.

The company – formed in the early 1990s – started the BEE restructur­ing in 2001.

At the time Mkhize was appointed and Mashaba said she introduced him to the opportunit­y.

Mkhize has resigned as an executive director of Aerosud since she was appointed to government office in May.

She declared her 8 percent stake in the company in Parliament’s Register of Members’ Interest, saying it amounts to “plus-minus R9 million shares and financial interests”.

 ??  ?? The A400M, one of eight to 14 planes that the Thabo Mbeki government ordered for African peacekeepi­ng missions at the potential cost of R47 billion.
The A400M, one of eight to 14 planes that the Thabo Mbeki government ordered for African peacekeepi­ng missions at the potential cost of R47 billion.

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