Old Mutual has bought a 20% stake in Amabubesi Investments, the company chaired by former director of national prosecutions Bulelani Ngcuka.
Making the announcement in Johannesburg on Thursday, Old Mutual MD Roddy Sparks said the deal continues the work the company has done since 1996, when it began investing in empowerment companies. He was also encouraged by “the current environment of strong winds blowing in favour of empowerment companies”.
Old Mutual’s investment in empowerment companies has seen it establish relationships with World Wide Africa Investment Holdings, Nozala Investments, Reuel Khoza’s AKA Capital, and Brimstone, among others.
Last year the Mail & Guardian reported that Ngcuka was in line for a stake in the group, which also owns Nedcor.
Sparks reiterated Old Mutual’s commitment to announcing its group-level empowerment deal during the year. He said the Amabubesi transaction was “unrelated” to the empowerment deal and he would not be drawn on whether it necessarily rules out Ncguka as a partner at group level. Â
The first part of the deal is a purchase of Amabubesi preference shares by Old Mutual for R50-million. The first R20-million has been paid and the balance is due in January next year. Amabubesi will then run a R150-million investment fund, set up with cash from Old Mutual, to help entrepreneurs.
A relaxed-looking Ngcuka told the media Amabubesi is looking to be a significant player within the next 18 months. He described the company as a “new generation of BEE player” that would like “to involve other people”. Â
Former Transnet executive Sango Ntsaluba heads Amabubesi’s operations as CEO. According to Ngcuka, the company has a number of investments, including an interest in security company Stallion.
Ngcuka said the company will look to invest in health care, transport and logistics, property and telecommunications. It will also look at cash generating “opportunistic investments”.