JOHANNESBURG - The South African National Taxi Council has acquired a 25 percent stake in SA Taxi for R1.7 billion, following several years of a mutually-beneficial working relationship.
SA Taxi finances entrepreneurs who operate minibus taxis that may not otherwise have access to credit from traditional banks, with a view to helping improve the safety of public transport in South Africa.
Together SANTACO and SA Taxi have granted loans and offered affordable insurance premiums to operators to create jobs and broaden financial inclusion in the country, among other initiatives.
"This transaction provides broad-based participation and a framework for wide-reaching initiatives that will grow and support the sustainability of the minibus taxi industry at every level into the future," a statement on the deal said.
The proportional ownership structure, held by SANTACO and broad-based provincial bodies, will ensure that ownership and associated economic benefits of this investment accrue to all levels by way of a trust.
Of the R1.7 billion purchase price, approximately R1.2 billion will be funded jointly by Standard Bank and Futuregrowth Asset Management.
The remainder will be facilitated by SA Taxi in the form of vendor funding.
SA Taxi will use approximately R1 billion of the net proceeds to settle interest bearing external and shareholder debt, with the remainder retained to fund growth.
- African News Agency (ANA)