IDC names bidders for Foskor BEE deal

The Industrial Development Corporation (IDC) on Wednesday announced the successful bidders for a 26% broad-based black economic empowerment (BEE) stake in phosphate and phosphoric acid producer Foskor.

It was announced that the IDC and Foskor had chosen a total of 12 consortiums—the Manyoro Consortium—which would acquire 15% of Foskor’s issued share capital.

This followed a competitive bidding process, inviting participation from black business consortiums and broad-based special interest groups.

The remaining 11% is split between two special purpose vehicles (SPVs) for staff and local communities.

The transaction will have in excess of a million beneficiaries, including women and beneficiaries with disabilities.

To ensure that all interested parties from all parts of South Africa were able to participate, the IDC ran a competitive bidding process and has provided a fully vendor-financed funding package for all parties.

“The transaction is in line with one of the IDC’s core objectives of broadening economic participation and facilitating industry development. The high level of interest from strategic business partners and broad-based groupings highlights the strength of Foskor as a business and the attractiveness of its shares as a BBBEE investment,” said IDC CEO Geoffrey Qhena.

The IDC said if Foskor pursued an IPO in 2009, then the acquisition price would be based on Foskor’s initial public offering price.

If Foskor was not listed in 2009, an independent valuation would be undertaken to price the transaction.

The IDC will fund the entire consortium.

All BBBEE parties are required to make an equity contribution in proportion to their direct stakes.

The IDC further explained that the Manyoro Consortium was comprised of six strategic black business partners, led by Makana Energy Consortium (MEC).

The Strategic Business Partners would control 67,1% of the consortium, while broad-based special interest groups would acquire the remaining 32,9%.

SPV2, which would own 5% of Foskor, was comprised of the Phalaborwa Community Trust (50%) and the Richards Bay Community Trust (40%), with the balance set aside for other communities to be identified.

SPV3 would own 6% of Foskor and had been set up for the approximately 2 000 Foskor employees.

The IDC said it would remain with 59% ownership of the phosphate producer.

The strategic black business partners are Makana Energy Consortium (19,3%), RSA Capital (14,2%), Umanyolo Investment Holdings (8,5%), Palama (12,2%), Ufhata Consortium (7,7%) and Mgwali Investments (5,3%).

The broad-based special interest groups represented in Manyoro Consortium are: AWCA Investment, Azara Consortium, Disability Empowerment Concerns, SBR, Phalimpopo and Podwala.

Each holds a 5,5% stake in the Manyoro Consortium.—I-Net Bridge