Announcing the agreement at a media briefing in Rosebank, Johannesburg yesterday, SBA CEO Tom Hendry said the move is in pursuance of a planned strategic thrust by the contractor to position itself as the leading building contractor in the region, with strong empowerment credentials.
The transaction will also enable SBA to become the only major contractor in the country with a substantial BEE shareholding, he added.
“Our management strategy is to create a genuinely empowered company in terms of both shareholding and operational management. “We are happy with our association with the team at Leswikeng Building and welcome their contribution to the continuing transformation of the company through the formulation of sustainable empowerment strategies,” said Hendry.
He promised that SBA will continue to pursue joint ventures with various previously disadvantaged enterprises.
“We believe the construction opportunities in the country are huge and that the industry can truly benefit from the involvement of a strong BEE presence,” said Leswikeng’s executive chairperson Herman Mashaba.
In the new company structure, Mashaba will assume the role of non-executive chairperson and Max Sisulu, a Leswikeng representative, will serve as a non executive member.
“A new era has dawned where black entrepreneurs take their rightful place and we are proud to be at the forefront of this initiative,” said Mashaba. SBA’s order book is currently sitting at around R1, 5-billion. “We will therefore achieve a turnover of R1,1-billion in the financial year ending April 2004 and a substantial amount of work continues into 2005.
“This move is aimed at giving us better access to negotiate work in the traditional contracting industry and an improved profile to tackle the new initiatives of government in the PPP process,” enthused Hendry. Rand Merchant Bank (RMB), through its private equity operation RMB Ventures retains a 40% share in the business with the balance in the hands of the management team.
Total empowerment shareholding now stands at 33%, of which three per cent is owned by a previsly disadvantage member of staff.
RMB’s positive approach and support for the deal was key to the success of the transaction, according to Hendry. “RMB Ventures specialises in transactions which empower management teams and BEE partners, with shareholdings in growing, successful businesses.
“We are proud to be associated with the management team at SBA, and Leswikeng, as our fellow shareholders, concluded RMB’s head of private equity Ketso Gordhan.