IDC envisages a hands-on role for Phetogo in KWV
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Consumer Industries Editor
CAPE TOWN The Industrial Development Corporation (IDC) chose to finance the Phetogo consortium`s purchase of a stake in liquor giant KWV from among hundreds of applications it received.
The deal offered the black empowerment group a 25,1% stake in a solid and prosperous company that had growth potential, IDC chief investment officer Raisibe Morathi said yesterday.
She was addressing the signing ceremony concluding the R200m purchase by Phetogo Investments, with finance from the IDC, KWV and the SA Wine Industry Trust (Sawit).
Morathi said KWV`s support for the transaction was so important that it would not have succeeded otherwise, and with funding from the trust the transaction became affordable for the participants.
Participation by the consortium in KWV`s affairs was important for the IDC, and Phetogo`s members had shown they did not intend to be passive shareholders but instead part of the company`s growth and idea generation, Morathi said.
The IDC has advanced R120m of the funds needed through different instruments, mainly five- and 10-year loans at variable market-related interest rates, she said.
The remainder of the financing is about R40m from KWV and R40m from Sawit.
Sawit chairman Gavin Pieterse said the trust assisted with the R40m upfront payment required from the consortium, excluding the KWV Employee Empowerment Trust, and had set aside R80m for further annual payments over the next five years.
The trust`s loans were extended to the whole consortium, but different repayment or debt servicing arrangements have been entered into with different members. The community organisations are being charged lower rates than the commercial organisations.
Phetogo Investments chairman Victor Christian, who joins the board of KWV, said the deal was the biggest black economic empowerment deal in SA`s wine and agricultural industry to date.
While the structures of some past empowerment deals were questionable, he said, the principle of empowerment could not be ignored.
It was in SA`s long-term interests that the entry of previously disadvantaged individuals into the mainstream economy be accelerated. Phetogo had the appropriate structure to do so, Christian said.
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