Johnnic’s stake in Toyota SA may go to a multinational, not the National Empowerment Consortium, if ongoing negotiations succeed, writes Tebello Radebe
A major multinational company has been urged to buy Johnnic’s stake in Toyota South Africa, worth more than R230-million, for fear that a successful bid by the National Empowerment Consortium (NEC) could jeopardise the company’s prospects.
Confidential documents obtained by the Mail & Guardian reveal that top-level meetings were held abroad to persuade the chief executives of the multinational to buy out the 21,4% Toyota stake in the Johnnic portfolio held by the Anglo American Corporation.
Among the reasons given for “seizing the opportunity” for a deal that would partly thwart the biggest black economic empowerment deal are:
l Buying the Johnnic stake would make the rest of the bid more affordable to the black investors;
l Possible New Africa Investments Limited (Nail)/NEC internal divisions and “lack of” industrial business experience could negatively impact on Toyota’s business decisions;
l Nail/NEC has more interest in Johnnic’s media interests;
l Nail/NEC has more interest in service-oriented business with smaller capital requirements, quicker dividend returns and more opportunity for black advancement than in an industrial environment; and
l A possible hostile takeover of Toyota should the black investors decide to sell to raise cash to pay their debts.
Interestingly, the proponents of the plan made clear there were no longer fears that black investors were most likely to be overly friendly to trade unions nor fears about the possible relationship between black investors and the workers — the biggest threat they saw was in black investors not realising enough cash to service their huge loans.
The deal was to have gone through by the last week of June or first week of July and extensive precautionary steps were taken to “prevent press leaks, speculation or rumours” before a major announcement.
Page two of a summary of the document states: “[What is] not negotiable is that management of Toyota should remain in the hands of the present South African management and its appointees for the motivation of the present capable management.”
However, when asked to comment, Bert Wessels, Toyota South Africa executive chairman, referred M&G to the multinational and Anglo American, saying he was “not empowered to speak” for other companies.
He nevertheless stressed that Toyota South Africa “would welcome black investors” should the NEC bid succeed.
M&G attempts this week to obtain confirmation from the multinational company were unsuccessful. A staff member said the top executives responsible for Africa “were out of town”.
The proponents of the Toyota deal claim that both Dr Nthato Motlana of Nail and the NEC’s Wiseman Nkuhlu “were not interested” in the Toyota shares because the company had a low yield dividend policy which would not be useful for generating the high income required to service the loans needed by the black investors.
But Motlana was quick to distance himself from these claims. “I have made no such statement. Anglo made the offer [to sell Johnnic] to us as a package, you can’t pick and choose which assets you want to buy. All this is just people talking and nothing else. Some say Nkuhlu is only interested in the Premier Food shares and nothing else — this is not true,” said Motlana emphatically.