IDC funds BEE stake in waste firm
Posted Wed, 22 Oct 2003
The Industrial Development Corporation (IDC) has signed a R250-million deal to finance a black economic empowerment (BEE) company, enabling it to buy a 25 percent stake in a recycling and waste management company.
The deal, signed in Johannesburg on Tuesday, will effectively give 25 percent of the shareholding power of recycling and waste management company Reclamation - valued at R1-billion - to BEE firm Phamangu.
The IDC - a department of trade and industry institution - will warehouse the shares on behalf of Phamangu while conferring shareholder rights during the period of funding.
The current Reclamation shareholders - Brait, Bidvest and Reclamation management - will sell down their stakes proportionately to Phamangu.
IDC chief executive Khaya Ngqula said the deal has the potential to make an impact through exports into the continent, thus stimulating entrepreneurship in recycling and waste management.
"The Phamangu and Reclamation initiative,
besides its financial benefits for the shareholders, also holds enormous entrepreneurial and commercial opportunities as well as environmental benefits for the surrounding communities at sites where they operate," Ngqula said.
Johannesburg-based Reclamation is a recycling and waste management group focused on the ferrous and non-ferrous metals market, with operations in waste paper, cardboard, glass, rubber and plastic recycling. It recycles in excess of one million tons of material annually.
Prince Phaweni and Sello Mahlangu, two of Phamangu's directors, will become executive directors of Reclamation. Phaweni said the deal will empower a number of other small businesses which they outsource services to.
"This initiative will bring about significant increases in the numbers of black people that manage, own and control the country's economy", Phaweni said.
Source: BuaNews
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