May 20, 2003
By Margie Inggs
Durban - Thebe Investment Corporation has secured a funding agreement in principle from the Industrial Development Corporation (IDC) to buy a significant stake of McCarthy, southern Africa's second-largest motor retailer.
However, James Alderslade, the financial director of the empowerment financial services and tourism company, said yesterday that financing the deal was still subject to a due diligence and IDC board approval.
Eight banks, which recapitalised McCarthy to the tune of R1.1 billion in 2001, have given it two years to attract potential buyers for their 85 percent equity.
Alderslade said Thebe had received a "very positive" response from the Development Bank of Southern Africa.
Speaking after a behind-closed-doors meeting yesterday, McCarthy chief executive Brand Pretorius said Thebe was favoured to acquire at least 25 percent of the group.
Alderslade said the empowerment company was holding out for at least 33 percent.
A 25 percent stake would be worth R162 million, while a 33 percent share would set Thebe back about R214 million
.
However, Alderslade said pricing had not yet been discussed.
McCarthy had had talks with several potential empowerment partners for "quite a few months", but while none of them had been ruled out, Pretorius said talks had been held primarily with Thebe as "very few black companies had sufficient financial resources to acquire a meaningful stake in McCarthy".
"Thebe would be a good fit because of its financial services and tourism interests.
"Other important elements are the good chemistry between the groups and Thebe's capable management team. However, issues that still need to be clarified include the size and price of the stake, the structure of the partnership and what would be best for the group," Pretorius said.
A significant empowerment partner was important strategically as it would better position McCarthy to do business with the government, quasi-government firms and parastatals.
McCarthy fell 1c to close at 25c.
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