Reunert sells 25% of its cable interests to Powerhouse
Tuesday, 16 November 2004
Johannesburg – Electronics and electrical engineering company Reunert Limited is to sell 25,1% of its cable interests to black owned company Powerhouse Utilities (Pty) Limited. The empowerment transaction is valued at R130 million effective 1 December 2004.
Structuring a black empowerment equity (BEE) deal was made possible after Reunert acquired Pirelli NV’s 50% stake it did not hold in African Cables Holdings on 30 September 2004.
“Acquiring Pirelli’s shares allowed us to restructure our holdings in African Cables and ATC,” says Reunert chief executive Gerrit Pretorius. Reunert’s combined cabling interests is valued at R520 million, making this the largest BEE transaction in this industry to date.
“Powerhouse Utilities will be our BEE partner in both ATC and African Cables. We have been working closely with them for the past year and are pleased to welcome them on board,” Pretorius said.
This deal presents an ideal BEE model in that the Reunert group chose to deviate from the popular practice of big business by choosing to empower a truly emerging BEE company with the relevant track record and hands-on experience. We are both grateful and excited to be partners in the Reunert group in jointly building economic value for both our shareholders and staff while delivering quality products at affordable prices,” said Patrick J Banda, chairman and chief executive, Powerhouse Utilities.
Powerhouse Utilities is an affirmative business enterprise established four years ago with the purpose of providing a utilities management, development and consultancy service to its clients. Powerhouse is wholly black owned and controlled with 24% of its equity held by black women entrepreneurs.
In the power industry Powerhouse Utilities is involved in debt collection, electrification and project management for various municipalities; project management and property management for local and provincial governments as well as community facilitation.
ATC specialises in the manufacture of copper and optical fibre telecommunications cable for public network operators. ATC was established in 1972 and is based at Brits in North West Province.
African Cables is one of the forerunners in the South African cable industry and is engaged in the design, development, manufacture, installation and maintenance of insulated power cables. The company is based at Vereeniging in Gauteng. It holds a 72% share in Cafca, a Zimbabwean cable manufacturer.
Reunert is an electronics and electrical engineering company listed on the JSE. Its electrical engineering division consists of Circuit Breaker Industries (CBI), African Cables and ATC. The electrical engineering division contributed 19% of turnover and 25% of operating profit to the group’s results that were announced today.