| Wed 11 Feb 2004, 9:15 | | KWV empowerment deal |
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COMPANY NEWS
KWV empowerment deal hailed as crucial step in transformation
February 11, 2004
By Vera von Lieres
Cape Town - Wine and liquor producer KWV's black economic empowerment (BEE) transaction, unveiled this week, was another crucial step in transforming South Africa's wine industry, participants close to the deal said yesterday.
Previously less than 1 percent of the industry, the eighth-biggest producer of wine internationally, had a BEE component. While the transaction pushes this figure up quite a bit, it is still a small drop in the ocean.
The deal, by far the biggest equity-related transaction in the sector, has been valued at between R150 million and just over R200 million.
It involves a black-owned consortium, steered by Gavin Pieterse, the chairman of the SA Wine Industry Trust, which will take a 25.1 percent stake in KWV.
Pieterse said yesterday the consortium had entered into option agreements with a select group of shareholders but would make the offer to all shareholders.
It consisted of a combination of broad-based organisations representing workers, unions and communities operating in the wine industry as well as high-level, hand-picked individuals "to extend support from a business point of view".
The details of the deal were being finalised.
Danie de Wet, the chairman of KWV, emphasised that the deal paved the way for genuine social upliftment. "It will help people to help themselves," he said.
Two black directors appointed to the KWV board would be tasked with the company's social responsibility commitments.
KWV, one of the biggest wine producers and exporters in the country, last year completed the transformation from a co-operative to a commercial company and exceeded turnover of R1 billion for the first time.
It said at its most recent annual meeting that the volume of its exported branded products showed healthy rises in the US last year.
KWV's 10-year-old brandy won the Best Brandy in the World title for the eighth time last year while its premium wine, the Cathedral Cellar range, drew international recognition.
Black empowerment deals in the wine industry late last year included an announcement by Beyers Truter, a wine maker at Kanonkop and Beyerskloof, that 60 farm workers on surrounding farms Beyerskloof, Kanonkop and Uitwyk had bought 74 percent of the shares in the 56ha Bouwland Estate near Stellenbosch for R9.6 million.
