VENTURES: Black PSG In The Making
Recent Western Cape Business News
CAPE-based empowerment company Thembeka, headed by former MasterCurrency founder KK Combi, has very quietly built an investment company with an intrinsic value of over R1 billion in just over six years.
This is rather astounding growth since the company’s formation in late 2005 when Thembeka held an intrinsic value of nil – it’s balance sheet showing R80 million in assets and R80 million in debt.
To put the company’s growth in perspective, Thembeka carries a value that is roughly double the combined market capitalisations of Sekunjalo and Cape Empowerment – two well established Cape Town empowerment companies (both founded in the late nineties).
Thembeka’s success stems mainly from well-timed investments in strong performing financial services assets like its 3.7% stake in Capitec Bank and 6% shareholding in PSG (a company which has strong links to Thembeka).
More importantly, dividends from these investments has allowed Thembeka to reward its shareholders with generous payouts, the latest dividend being a 70c/share distribution.
Already there is an increasingly audible murmuring that Thembeka could become a black PSG – not because PSG has a major shareholding in the business (via Paladin) but because the underlying investment portfolio almost mimics that of the Stellenbosch investment icon.
Aside from the holding in Capitec, Thembeka (like PSG) has a penchant for agribusiness assets (with investments in Kaap Agri/Pioneer Foods, Overberg Agri, MGK and BKB) as well as a 4.2% shareholding in the JSE (which was once a major investment for PSG).
Then Thembeka also has a diverse portfolio of unlisted investments ranging from a 51% stake in Greymatter & Finch (a financial advertising specialist), a 25% stake in Access Freight, 25% of private equity firm Spirit Capital to promising industrial investments like Precrete, GRW Engineering, Green Square and Bontebok Lime.
It seems Thembeka is still actively on the investment trail with Combi reporting recently to shareholders that the company invested some R160 million in the 2011 financial year.
This spend included snaffling another 250 000 PSG shares, another
525 000 Capitec spending R70 million to take a 15% stake in Kaap Agri Bedryf Limited and another R20 million to participate in the attractively priced MTN Zakhele share offer.
Probably more important is that Thembeka is not afraid to take profits from its investments. The company realised almost R60 million by selling shares in the JSE, telecoms group Vox, CIC Holdings and unlisted VMS Investments.
Thembeka – much like the Cape’s premier empowerment venture Brimstone - clearly intends to sustain its empowerment initiatives over the long term.
Combi argues that while there are many flaws in the way that BEE has historically been implemented, it remains the only viable solution to achieve transformation in the private sector over the long term.
“With this goal in mind, we continue to see opportunities for Thembeka and its shareholders, specifically because of Thembeka’s broad-based structure and management experience.”
Heartening…because at last count, broad-based empowerment investors held nearly 40% of Thembeka.
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