Sekunjalo founder and chairman Dr Iqbal Surve chats about his acquisition of the Independent Newspaper Group in his Claremont offices. Photo: Ian Landsberg

Johannesburg - South Africa’s largest union federation, Cosatu, along with two of its major affiliates and a Chinese funder, were key members of the consortium buying the South African business of Ireland-based Independent News & Media (INM), it was disclosed on Thursday.

The proposed R2 billion purchase of Independent News & Media South Africa (INMSA), which produces titles including Business Report and The Star, will see the Sekunjalo Independent Media (SIM) consortium take a 75-percent stake in INMSA, while the Government Employees Pension Fund (GEPF) will have the remaining 25 percent.

IOL is the digital division of INMSA.

“These are exciting times for us and the country,” Iqbal Survé, the chairman of the SIM consortium, said in a statement late on Thursday. “We know we can continue to grow and run this media group profitably.”

The lead shareholders and main consortium members within SIM would include:

- Sekunjalo Investment Holdings;

- Cosatu investment company Kopano ke Matla, represented by Collins Matjila;

- Sactwu Investments Group, the investment arm of the Southern African Clothing and Textile Workers Union, represented by Andre Kriel;

- the Food & Allied Workers Union, through Basebenzi Investments and represented by Katishi Masemola; and

- a special purpose vehicle to house a 10-percent stake for employees of the company.

This lead shareholder grouping will represent 63 percent of the consortium.

On Monday in Dublin shareholders of INM approved the sale, which comes as the Irish group battles to reduce its debt.

Survé said funding for the purchase would firstly come from SIM, from unnamed banks, including a firm commitment from an international bank, the trade union investment companies, the GEPF through the Public Investment Corporation, and a Chinese consortium.

The statement gave no details of the Chinese interest, which Survé said was a private investment group expected to invest in growing the business.

“To ensure that the business has sufficient capital resources to reinvest in vernacular titles, digital strategy, reinvigorating existing titles and an African growth strategy, additional funding has been arranged which may see a further shareholding or investment of 20 percent placed with the Chinese consortium,” Survé said.

The Chinese consortium was simply a funder, a private investment fund with no ties to the government, he stressed.

The disclosure of the members of the SIM consortium comes after Survé was put under intense pressure by commentators and media rivals to identify members due to concerns about editorial independence. Survé on Thursday reiterated his undertaking to appoint an editorial advisory board of eminent persons to safeguard the group’s editorial integrity.

All that remained now to close the transaction was approval from the Competition Commission. Since this was at an advanced stage, Survé was confident that ownership of the media group would soon “return to South Africa”.

The remaining 37 percent of the shareholding in the SIM consortium would be made up of broad-based “value-adding partners”, Survé said.

These partners included the Black Business Chamber (Western Cape), represented by Mntuwekhaya Cishe and Sizwe Seun Ngqame; various independent South African women’s business community organisations spread throughout the country, represented by Lindiwe Barbara Ngcobo and Manemele Maria; Sekunjalo Digital Media, which would assist in driving the digital and mobile growth strategy; the Mvezo Development Trust, represented by Mandla Mandela, which would provide for the development of the communities of the Eastern Cape; the Umkhonto we Sizwe Military Veterans Association, through the Military Veterans Trust; and the Western Cape Development Trust, which would provide bursaries for journalists from black communities.

Additional partners included prominent entrepreneurs and business people such as Sandile Zungu, and media and advertising personalities Tim Modise and Groovin Nchabeleng from Blue Print Group.

“The Sekunjalo consortium will at all times have control of INMSA with a number of funding partners sharing in the equity of the company,” Survé concluded. - Business Report