Mzolisi Diliza, executive chairperson of SPG, said yesterday the acquisition of the additional 12.8percent of BCC shares was a positive development for the black business community in South Africa.
“By increasing our stake in the massively successful and world-class Gautrain operation, we are effectively demonstrating the capacity of the black business sector to meaningfully take advantage of, and invest in, opportunities that present themselves in our country’s business environment,” Diliza said.
Founded in 2002, SPG, a black empowerment company, invests in the rail and road sector. The company also focuses on ancillary services surrounding projects including security services, information and communications technology, and advertising and communications.
SPG said both the Competition Commission and the Gautrain Management Agency had approved the deal.
BCC was appointed by the Gauteng provincial government in 2006 for the design, partial financing, build, operation and maintenance of the Gautrain rapid rail link.
The company holds a 15-year concession for operating and maintaining the Gautrain system which ends in 2026.
SPG held a 25percent shareholding in BCC at the incorporation with two development finance institutions providing it with a performance bond in the amount of R220m and a loan facility to the value of R196m to fund the transaction.
Earlier this year, two offshore investors - Bombardier and Bouygues - decided to dispose of their BCC shares.
Murray and Roberts last week completed the acquisition of a further 17percent shareholding in BCC worth R405m, bringing its total stake in the Gautrain operating company to 50percent.
Murray and Roberts’s initial stake in BCC was 25percent, and in 2011 the firm increased this to 33percent.
Last year, BCC and the Gauteng government agreed to a comprehensive settlement of all disputes relating to the Gautrain rapid rail link project’s development period, bringing an end to multi-year protracted legal processes.
The settlement pertained to a number of disputes, including the Sandton station cavern and the John Vorster and Jean avenues cantilever bridges in Centurion. A court had previously ruled in favour of BCC regarding these matters.
Diliza said the company had negotiated a favourable funding arrangement with Absa Bank in the current deal.
“This meant that we did not have to make use of our existing cash reserves or appeal to shareholders for contributions.
“What has emerged is a commercial arrangement that truly advances real black economic empowerment in our country and one that in the longer term will enhance returns for SPG shareholders.”
- BUSINESS REPORT