Johannesburg - Ericsson, a global technology software, services and infrastructure provider, had sold a 25.1 percent stake in its South African operations to Ringgold Consortium for an undisclosed amount in a broad-based black economic empowerment (BEE) deal, the Swedish company said yesterday.
Ringgold, a special purpose vehicle created last year, considered itself to be the catalyst to catapult Ericsson to the next level, Gift Mphefu, Ringgold’s chairman, said yesterday.
Both firms have declined to disclose the monetary value of the deal, which has notched Ericsson South Africa a level 4 borad-based BEE rating.
Mphefu said the deal was structured so that Ringgold would pay using its dividends over the next six to seven years.
The group contributes legal and business acumen, according to Mphefu, who said the South African communications landscape held opportunities, especially in the roll-out of broadband internet to the neglected people of the country and collaborations with municipalities, which were driving the roll-out in some cases.
“There are a lot of opportunities we are closing. I’m not at liberty to break down as to where we are going.”
Magnus Mchunguzi, the managing director of Ericsson SA, said the group had embarked on an extensive process to identify a partner. “We are confident that our partnership will further establish Ericsson as a preferred business partner in South Africa,” he said.
The consortium gains two seats on Ericsson SA’s board.
Mphefu, a former portfolio manager at Vodacom, and another shareholder, Thabi Leoka, the head of economic research at Renaissance Capital, have been appointed to the board as non-executive directors. Other Ringgold shareholders are Calvo Mawela, who currently heads stakeholder and regulatory affairs at MultiChoice, and Diliza Mbete, the chairman and managing director of Anista Partners Group. - Business Report