Old Mutual puts up R20m for stake in Amabubesi gro
Old Mutual puts up R20m for stake in Amabubesi group
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Financial Services Editor
OLD Mutual is buying a 20% stake in fledgling empowerment group Amabubesi Investments, and is also making cash available to help grow the group.
Amabubesi is led by former director of public prosecutions Bulelani Ngcuka and former Transnet executive director Sango Ntsaluba . Other shareholders include Don Group CEO Thabiso Tlelai and Old Mutual deputy MD Peter Moyo. The group`s investments include stakes in Stallion Security and Consolidated African Technologies.
As part of the deal, Old Mutual said yesterday, it would buy an initial R20m in preference shares from Amabubesi, which it might increase to R50m. It would also participate in a R150m investment fund, which would be used to grow the group`s investment base.
Old Mutual MD Roddy Sparks said the investment was being made on commercial terms. He was unable to disclose how much was being paid for the 20% stake, which would be used to cover day-to-day running costs at Amabubesi.
Ngcuka said the group was looking for investments in the healthcare, transport and logistics, property, telecommunications and media sectors. `It will enable us to pursue a number of opportunities. We want to be a significant player in the South African economy within 18 months.`
The deal helps Old Mutual meet its empowerment financing obligations as required by the financial sector charter.
Sparks said: `What`s important for us is that this investment follows on a number of other empowerment investments that we`ve made over the past seven or eight years.`
One of Old Mutual`s executives would take a place on Amabubesi`s board, said Sparks.
The Amabubesi transaction was unrelated to a deal that would see the group selling a 10% stake in its South African operations to empowerment partners, he said.
Old Mutual subsidiaries Nedcor and Mutual & Federal are also likely to be included in that deal, which Sparks said would be announced during the course of the year.
Yesterday, Nedcor announced that Hixonia Nyasulu had resigned as independent nonexecutive director and vice-chairman of the group.
A statement from Nedcor said Nyasulu`s Ayavuna Women Investments planned to acquire assets in the financial services sector and she was leaving Nedcor `to explore any opportunities which may exist within this sector without concerns about potential conflicts of interest`.
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