South African Deputy President Cyril Ramaphosa, who featured in FOBRES’ annual ranking of the richest Africans between 2011 and 2013, has successfully sold off his stake in investment company Shanduka Group to Pembani Group, a company controlled by Phuthuma Nhleko, the Chairman of mobile telecoms giant MTN Group.
Before now, Ramaphosa, 62, was the controlling shareholder of Shanduka Group, an investment firm that owns stakes in mining entities, financial institutions, McDonald’s South African subsidiaries and Coca-Cola bottling plants.
After being appointed as South Africa’s Deputy President last year, Ramaphosa exited Shanduka as chairman and shareholder, announcing that he was divesting from the company to remove the potential of any conflict of interest between his role as South Africa’s number two citizen and his business interests. Last November, Shanduka announced it was merging with Pembani Group, a black economic empowerment (BEE) investment firm founded by Nhleko. Pembani announced on Monday in an email to Journalists that the deal has been successfully concluded with the filing of regulatory documentation with South Africa’s department of mineral resources and the competition commission.South Africa’s Vice President Matamela Cyril Ramaphosa delivers an address during the Asian African Business Conference in Jakarta April 21, 2015. Asian and African leaders gather in Indonesia this week to mark 60 years since a landmark conference that helped forge a common identity among emerging states, but analysts say big-power rivalries will overshadow proclamations of solidarity. AFP PHOTO / ROMEO GACAD (Photo credit should read ROMEO GACAD/AFP/Getty Images)
The merger between Phuthuma Nhleko’s Pembani Group and the Shanduka Group will create one of Africa’s largest black-owned investment groups.
“The group will have a portfolio value in excess of 9 billion rand ($734 million) which will give it significant scale, with liquidity to pursue value-creating opportunities in sub-Saharan Africa,” Pembani said in its statement.
Though the terms of the deal were not disclosed, Ramaphosa is expected to earn at least $200 Million from the sale, using a 2011 transaction in which the China Investment Corporation paid $245 million for a 25% stake in the company as a benchmark. A South African investment banker who spoke to this writer believes Ramaphosa could have gotten more than $300 million in the transaction.
Rampahosa founded Shanduka Group as an investment company in 2001 after a successful career as a trade union leader and gobbled up stakes in blue-chip South African companies that were obligated to sell stakes to black-owned enterprises under the Black Economic Empowerment (BEE) programme. Ramaphosa’s Tshivhase family Trust previously owned 30% in Shanduka.