Absa Capital partners with Lereko Investments
Absa Capital and Lereko Investments, an empowerment investment holding company, announced today that they had concluded an agreement whereby Absa Capital acquired an equity stake in Lereko Investments.
Lereko Investments is led by Dr Popo Molefe, Mr Valli Moosa and Dr Lulu Gwagwa, all of whom held senior positions in the public sector before successfully pursuing careers in the South African business arena. They are joined by Monhla Hlahla, Murphy Morobe, Martha Molobi and Tsheko Ratsheko as Lerekos other shareholders. The Lereko team holds diverse and complementary experience and skills to contribute to selected investment opportunities.
Absa Capital's investment will strengthen Lerekos balance sheet and its operational capacity.
"This is not just another BEE deal but rather the establishment of a long-term strategic relationship between Absa Capital and Lereko Investments. Lereko is committed to enabling effective transactions in South Africa with a focus on adding value to and providing opportunities for broad-based participation in all its investments. Absa Capital, with its strong local and global capabilities, will play a significant role in assisting us to achieve our goals and enable us to accelerate our growth in a sustainable way," says Dr Molefe, former premier of the North West Province and now Chief Executive Officer of Lereko Investments.
Lereko Investments is black owned, controlled and managed and has strong corporate governance credentials. Its principal investments with industry leaders to date are:
* Imperial Holdings Ltd. Lereko Mobility (a company 49% owned by Imperial and 51% owned by a broad-based consortium led by Lereko) acquired a 7.25% stake in Imperial Holdings in April 2005.
* Sun International. In a transaction valued at approximately R600 million, Lereko's consortium acquired Sun International shares from the Public Investment Corporation and from the company's treasury stock. The deal was secured by a significant block of equity transferred to it by Sun International itself.
* Sappi. A broad-based empowerment consortium led by Lereko Investments, acquired a 25% economic interest in Sappi's South African plantation land portfolio for an amount of R224 million through a vendor-financed mechanism.
* Metier. The Lereko Metier Capital Growth Fund (LMCGF - 51% held by Lereko and 49% by Metier) was established to capitalise on the extensive experience and credentials of its principals to exploit and develop investment opportunities in South Africa. Going forward, Absa Capital will participate in the LMCGF as anchor investor.
* Lereko also has a stake in Anglo Platinum's Waterfall platinum reserve.
"The Absa/Lereko partnership is in line with the strategic intent of the Absa Group to boost its empowerment credentials by forming partnerships with respected and credible players such as Lereko," says John Vitalo, Absa Capital Chief Executive.
Lereko and Absa Capital aim to be proactive participants in the advising, funding and structuring of black economic empowerment deals in those sectors where Lereko is active. "There are a number of strategic initiatives already in the pipeline which will provide a good cross flow of deals for both groups," concludes Vitalo.
