Johannesburg - The R800 million finance provided by the Land Bank to Pamodzi Investment Holdings for the 49 percent secondary buyout of Foodcorp was not arranged by the company but by the Industrial Development Corporation (IDC).
Kgalema Motlanthe, the secretary-general of the ANC, and Manne Dipico, the former premier of the Northern Cape, are beneficiaries but not trustees of the Pambi Trust, which has an 8 percent interest in Pamodzi.
Motlanthe's shareholding in Pambi is 0.15 percent, while that of Dipico is 0.22 percent. They are two of the 57 high-profile black people who are beneficiaries of the trust.
This emerged during an interview yesterday with Ndaba Ntsele, Pamodzi's chief executive, and Sifiso Msibi and Kobus du Plooy, the executive directors.
The three were responding to allegations made by the Sunday Times that the Land Bank had funded the Pamodzi transaction because of Pamodzi's political connection with Motlanthe and Dipico.
Msibi said it had taken him and Ntsele a year to put the transaction together. Pamodzi had been involved in Foodcorp, one of Africa's largest processed food producers, since 1998 and it wanted to ultimately end up owning Foodcorp's assets.
"We opted for a leverage buyout and, as you know, this is full of debt."To test if the deal was fundable, we talked to a number of funders. Ultimately, we ended up talking to Xola Sithole at the IDC.
"He then explained to us that he could interest the Land Bank to be one of the funders.
"At that stage I remember us saying to him: 'But the Land Bank does not fund such transactions,'" Msibi said.
Sithole was the head of the food, beverages and agri-industries department at the IDC.
He told the two that the IDC had worked together with the Land Bank on several transactions in the food and agribusiness sector.
Ntsele and Msibi said Sithole offered to approach the Land Bank on their behalf. The IDC and Pamodzi agreed on a 1 percent raising fee for the IDC.
The transaction was completed in October 2003, with the IDC, the Land Bank, Old Mutual Asset Managers, Rand Merchant Bank and Nedbank as the funders.
Ntsele said the Pambi Trust held its shareholding in Pamodzi through its 10 percent interest in Shady Grove, a special purpose vehicle, in which African Merchant Bank (AMB) holds the remaining 90 percent.
To date, the beneficiaries of Pambi had not received a dividend from Pamodzi because AMB had not yet been fully paid for its shares.
Msibi said: "When we did the deal, we knew that we had to restructure it because it was onerous."
Du Plooy said that in December, Foodcorp mandated Bait to raise replacement funding and in June Foodcorp raised a 175 million euro (R1.4 billion) eurobond, the biggest for a South African company and a first for an empowerment outfit.
Some of this was used to pay off the R800 million Land Bank loan, plus R100 million interest.