The City of Cape Town has concluded a major black economic empowerment (BEE) transaction for the sale of the Epping Fresh Produce Market, the largest by a South African municipality to date. The transaction also includes an important and historic agreement with the South African Municipal Workers Union’s (Samwu) Cape Metro branch.
Announcing the conclusion of the R16-million deal on Monday, Councillor Saleem Mowzer, mayoral committee member for trading services, said the new owners, Cape Fresh International, would take up ownership of the market on March 1. The agreement further provides that all staff (including Samwu members) will be redeployed in the city’s structures.
Apart from generating R16-million from the sale of the business operations, the lease of the property at the market will bring R100-million into the city coffers over the next 20 years. The new owners will pay all city levies, rates and tariff charges at normal rates.
“At 65% BEE and HDI [historically disadvantaged individuals] ownership, the sale of the Epping Market is a major victory for black economic and broad-based empowerment,” Mowzer commented. “The successful bidder, Cape Fresh International, is an empowerment consortium with impeccable HDI and BEE credentials. This is the biggest empowerment transaction concluded by the City of Cape Town.”
The 65% empowerment ownership comprises: 40% Frater Asset Management (75% empowered), 15% Tresso Trust (100% empowered) and 20% black shareholders, comprising historically disadvantaged individuals, women groupings, NGOs and informal traders.
Although the empowerment shareholding totals 75%, the effective empowerment shareholding is 65%, due to the fact that Frater Asset Management comprises a number of white partners whose participation is offset from the total empowerment participation.
The remaining 25% represents management shareholding. NGOs participating in the deal include the Mustadafin Foundation, the District Six Beneficiary and Redevelopment Trust and Boorhanul.
Mowzer said that the decision to dispose of the Epping Market made sound economic sense.
“It is not the city’s core business to be operating a fresh produce market. Our core business is the delivery of essential municipal services and the sale of the market improves our ability to deliver these services. The city will continue to play a role in the market through law enforcement and the monitoring and regulation of health standards.” — I-Net Bridge