PERFORMANCE REPORT: 2ND QUARTER 2015/16

PERFORMANCE REPORT:

2ND QUARTER 2015/16 Presented to Portfolio Committee on Trade & Industry

Parliament of the Republic of South Africa

11 November 2015

NEF Delegation

1. Mr Rakesh Garach Acting Chairman of the Board of Trustees

2. Ms Philisiwe Mthethwa Chief Executive Officer

3. Ms Hlengiwe Makhathini Divisional Executive: Venture Capital &

Corporate Finance

4. Mr Setlakalane Molepo Divisional Executive: SME & Rural

Development

2

3

Contents

3

Section Slide

1 About the NEF 4

2 Life to date Performance Update: 30 September 2015 9

3 2014 /15 Performance Milestones 10

4 Current Economic Overview & Strategic Considerations

for the NEF 15

5 NEF Performance : 2nd Quarter 2015 18

6 Market Failures & NEF Investment Funds 24

7 Growing Black Industrialists 27

8 Recapitalisation: Funding the Funder 34

9 Detailed Life to date Performance Report: 30 / 09/ 2015 44

10 A sample of NEF Investees 57

About the NEF

4

NEF Mandate…

5

Established by the

National Empowerment Fund Act No. 105

of 1998, the NEF is a driver and

a thought-leader in promoting and

facilitating black economic participation

through the provision of financial and

non-financial support to black empowered

businesses, as well as by promoting

a culture of savings and investment

among black people.

The NEF is an agency of the dti and is the

only DFI exclusively mandated to grow

B-BBEE

5

6

Direct black equity control over the JSE’s average

market capitalisation of R12.2 trillion as at 30

October 2015 (for Listed Companies), stood at 3%

(R365 billion) for shares directly held by black

South Africans.

To reach 25% of black control it requires an

additional 22% worth R2.7 trillion at current

estimated market capitalisation of the JSE.

This is a gap that still needs to be addressed and

funded in order to achieve transformation of up to

25% of JSE market capitalisation.

Strategic Need for B-BBEE

Source: Who Owns Whom &

JSE market data, 30 October 2015

Broad Based Black Economic Empowerment

The Codes of Good Practice

7 7

Strategic Planning Framework… N

EF

Ac

t:

Ob

jec

tive

s

Th

e d

ti

Ob

jec

tive

s

Government Priorities:

1) Acceleration of economic growth and transformation,

creating decent work and sustainable livelihoods;

2) Infrastructure development to achieve social and

economic goals and rural development;

3) Skills and human resource development;

4) Build a developmental state and improve public service.

Sectors

NEF

• Tourism; Biofuels; Construction;

Agri-processing; Transport; ICT &

Media; Mining services; Franchising

Industrial Policy Action Plan:

• Automotives, components, medium

and heavy commercial vehicles

• Plastics, pharmaceuticals and

chemicals

• Biofuels

• Strengthening linkages between

cultural industries and tourism

• Business process servicing

NEF Sectors in line with national industrial objectives

8

“The Empowerment Dividend”

Broad Based Black Economic Empowerment Ownership, management control, employment equity etc.

Black Women Empowerment

Job Creation

Growth Sectors

Geographic Spread

Investment Return

The assessment of impact is not driven only by financial returns

but by measurement in terms of “The Empowerment Dividend”

made up as follows:

NEF’s Performance

and Investment Criteria…

Life to Date Performance Milestones Output Achievements

1 Approvals Benefited black entrepreneurs through approval of 688 transactions worth more

than R6.6 billion across the country.

2 Disbursement Approximately R4.6 billion has been disbursed to these companies since

inception.

3 Integrity Secured unqualified external audit opinions for 9 years running.

4 Supporting jobs To date the NEF has supported in excess of 82 900 jobs.

5 Industrialisation 24 strategic and industrial projects worth R27 billion, with the potential to

support over 80 000 jobs.

6 A culture of savings &

investment

In a transaction worth over R1 billion the NEF Asonge Share Scheme made

available more than 12 million MTN shares to over 87 000 investors comprising

black individuals and groups. 49% of investors were women.

7 Investor education

Reached over 24 000 people in villages and townships through 120 community

seminars on how to save and invest, personal financial discipline, shares,

dividends, bonds, the property and money markets.

8 Entrepreneurship

training / incubation

Business skills training provided over 2 500 potential entrepreneurs who

attended 105 seminars from 2012 to date.

9 National footprint

Regional offices in all but one province. 42% of the number of approved

transactions emanated from the regional offices and Pre-Investment Unit, year to

date as at 30 Sept. 2015. Northern Cape office to start operating in Q4.

10 Collections Over R1 billion has been repaid by investees.

9

A High-Performing Organisation (2014/15 Performance Highlights)

Output Achievements

1 Approvals Approved 94 deals worth R895 million against a target of 96 deals worth R718

million

2 Commitments R879 million against a target of R619 million; 75 deals against target of 80

3 Disbursement R562 million against a target of R650 million

4 Supporting jobs

Supported 33 763 job opportunities (of which 32 820 are new), bringing total job

opportunities geared to be supported since inception in excess of 81 000

5 Unencumbered cash Cash that is immediately available to the NEF for new approvals is R735 million

6 Enterprise

Development

Secured R6.3 million in the year. The Fund’s ability to attract more contributions

adversely affected by changes in legislation.

Since inception, approval at R50 million of total R53 million received.

7 Black Women

Empowerment

47% of commitments made in year were towards businesses partially/wholly

owned by women (target at 45%).

Total women ownership of portfolio since inception at 26% vs target of 30%

Through Rural Community Trust Investments, effective woman shareholding in

rural areas is 60%

8 Collections Portfolio collections for the year at R440 million are 25% above 2014 receipts

10

Cash Collected

11

Over R1.5 billion collected cumulatively from loans disbursed across

the country, in black-owned and managed businesses across virtually

all sectors of the economy.

-

50 000 000

100 000 000

150 000 000

200 000 000

250 000 000

300 000 000

350 000 000

400 000 000

450 000 000

500 000 000

2010 2011 2012 2013 2014 2015

Receipts Amount

2010

2011

2012

2013

2014

2015

YTD collections at R139 million.

Collections of over R280 million anticipated from three deals (ie Link Africa, Busa Med

and Sizovuna ) by the end of the 2016 financial year. This is over and above normal

instalments to be raised on the portfolio. Anticipating total collections for 2016 to surpass

2015 levels.

A High-Performing Organisation (2014/15 Performance Highlights) / cont…

Output Achievements

9 Industrialisation

Progressed 5 projects to the pilot, financial close and

commercialisation stages in portfolio:

1. BusaMed Hospitals – 1st hospital now operational with 1st

patient admitted on 04 May 2015

2. Auto-Disposable Syringes (Kenako Medical) (BFS to FC) -

R177mn plant; only manufacturer of Syringes and Needles in

SADC region

3. Tyre Energy Extraction – Accredited by REDISA as a recycler;

and have fully secured offtakes for all products

4. KC Energy – 1 boiler fully operational generating revenue,

approach from various interested parties to buy into the business

5. African Silica Holdings – in the process of obtaining offtakes

from Rand Water

12


13

10

Pre-Investment

& Regional

Offices

• 1413 applications received (36% lower than 2013/12

(1917), but 259.5% increase from 2013/14 (393))

• 52 deals worth R321 million approved in year (40 Regions

(R220m) & 12 Pre-Inv. (R101m)

• R28.4 million collected from the POIU portfolio, which is

78% of instalments raised

• Achieved >80% of new target to disburse funds in NC,

FS, LP, MP and NW (ie R133.4 million vs target of R163

million)

11 Geographic

Activity

Disbursements in the year represent only 44% towards

Gauteng

Since inception, Gauteng comprise 45% of invested portfolio.

12

Rural &

Community

Development

Rural deals since inception are geared to empower 30

communities and over 1.8 million individuals

13 Entrepreneurial

Development

21 Business Today training sessions provided, and 89

entrepreneurs referred to incubation partners, with 16

being successfully incubated

14 Collections &

litigation

Managed increased litigation pipeline of 38 transactions with a

value of R247 million. Increased collections on deals in

litigation - collections of R53 million against legal fees of R5

million


Output Achievements

15

Active Portfolio

Management

Portfolio impairment improved to 18%

ROI at 9.14% is within targeted rate of 8-10%

Collection ratio at 84% vs target of 75%

18 successful exits at 1.31 times money back

TWR facilitated 2 turnarounds, 1 Business rescue and 9

restructures (3 of which have been returned to POIU for normal

portfolio monitoring)

16 Tracking

Register

Overdue findings decreased by 13% from the previous year and

overall total findings decreased by 50% in the same time period

17 IST Governance

IST governance framework continue to be entrenched through the

steering committee as well as policy and SOP formulation

2 cost saving initiatives implemented (Voice over IS and Hybrid Cloud

solutions)

18 Preferential

procurement

Improvement in procurement from black-owned entities at 62.9% as

compared to 49.8% in 2013/14

19 Media coverage AVE coverage of R42 million. 88% of the coverage was positive, 8%

neutral and 4% negative in tonality.

20 Socio-Economic

Development

39 Investor education interventions (incl 5 Industrial Theatre

Programmes) in 8 provinces with reach to about 6000 people

Implemented 7 social plans

14

Current Economic Overview &

Strategic Considerations for the NEF

15

Economic Landscape

16

Global overview:

• Global economy has been significantly impacted on by a continued

decline in Chinese economic growth affecting iron and steel

manufacturing sectors

• Commodity prices continue to fall especially as a result of decreasing

Chinese demand and oversupply.

• Modest to low growth in the USA and European markets

Domestic overview:

• The fall in commodity prices as a result of weak Chinese demand has

had a negative impact on the mining sector.

• Locally, labour unrest and energy constraints add pressure on the

economy

• Decline in economic activity in the Mining and Steel Manufacturing

sectors has led to widespread retrenchment announcements

• Persistent US Dollar strength against a weakening Rand

Subdued economic outlook has seen weakening growth rates. GDP

is expected to be 1.5% (from initial forecasts of 2.0%) in 2015, and

1.6% in 2016.

17

Considerations for the NEF The economic climate calls for heightened post-investment

monitoring:

1. Post-Investment Unit (POIU) reports that investee companies are

requesting:

• Moratoria

• Reduced instalments

• Extension of loan tenures

2. Five of the seven companies transferred to the Turnaround,

Workouts and Restructuring Unit are in the manufacturing and

construction sectors which have experienced the knock-on effects

of the decline in the steel manufacturing and mining sectors.

NEF Targeted interventions include:

1. Hybrid model of post-investment monitoring – The Funds work

hand-in-hand with the POIU in a monitoring capacity shortly after funds

have been disbursed

2. Training to support anticipated wide-spread retrenchments

• Investor education

• Entrepreneurial training

• Business planning

18

NEF Performance: 2nd Quarter

ending 30 September 2015

19 19

The NEF’s strategic objectives

Strategic Pillars Detailed objectives

1.

Advancing BEE &

Growing Black

Industrialists

To provide finance to business ventures established

and managed by black people.

2.

Maximising the

empowerment

dividend

Invest in black empowered businesses that have high

employment creating opportunities

Support the participation of black women in the

economy

3.

Optimising

non-financial

support

Facilitate investment across all provinces in South

Africa

Encourage and promote savings, investment and

meaningful economic participation by black people

Advance black economic empowerment through

commercially sustainable enterprises

Establish the NEF in the South African economy as a

credible and meaningful DFI

4. Financial efficiency

& sustainability Establish the NEF as a sustainable DFI.

Output

Performance

Measure or

Indicator

2nd Quarter

Milestones

2nd Quarter

Reported

Results

YTD

Achievement

(Nov 2015)

Reason for variance

and corrective Action

Provide finance to black

empowerment business by

investing in the form of

loans, quasi-equity and

equity finance through funds

and funding products,

targeting black rural

enterprise, SMEs, corporate

finance and venture capital.

Value of deals

approved by the NEF

(R million)

R551 m

R336 m

R460 m

To date there are at

least 28 deals worth

approximately R537 m

in due diligence stage

to be packaged for final

approval by respective

NEF Committees

Value of new

commitments

(R million)

R419 m R147 m R220 m

30 approved deals

worth R325 m are in the

pipeline are undergoing

Legal agreements

Value of new

Disbursements

(R million)

R357 m R265 m R307 m

The disbursement team

will focus on this once

commitments in the

pipeline have been

concluded

20

Advancing B-BBEE Strategic Objective 1: To provide finance to business

ventures established & managed by black people

Maximising the Empowerment Dividend Strategic Objective 2: Invest in black empowered businesses that

have high employment creating opportunities.

21

Output Performance Measure or

Indicator

2nd Quarter

Milestones

2nd Quarter Reported

Results

YTD Achievement

(Nov 2015)

Invest in black

empowered

businesses that have

high employment

creating opportunities.

Number of jobs expected to be

supported or created

Support

2 203 new or

existing job

opportunities

1 330 (of which 961 are new)

1 831 (of which 1 242 are new)

Support the

participation of black

women in the

economy

Percentage of portfolio

disbursement owned by women 40% 43% 35%

Percentage of committed deals

partially/ totally owned by

women

45% 46% 47%

Facilitate investment

across all provinces in

South Africa

Percentage of disbursements

to be invested in EC, NC, NW,

MP, FS and LP

25% of

disbursements

to be invested

in EC, NC, NW,

MP, FS and LP

A total of 28 deals worth R127

m is invested as follows:

NC: 2 worth R9 m

FS: 4 worth R13 m

LP: 6 worth R46 m

MP: 6 worth R8 m

NW: 5 worth R32 m

EC: 5 worth R19 m

This is 48% of disbursements

YTD, a total of 36 deals worth

R142 m is invested as follows:

NC: 2 worth R9 m

FS: 5 worth R14 m

LP: 8 worth R51 m

MP: 8 worth R11 m

NW: 7 worth R38 m

EC: 6 worth R19 m

This is 46% of the YTD

disbursements

Optimising Non-Financial Support

Strategic Objective 3: Black Economic Empowerment is advanced through

commercially sustainable enterprise

22

Output

Performance

Measure or

Indicator

2nd Quarter Milestones


Results

YTD Achievement

(Nov 2015)

The provision of non-

financial support and

training for black-owned

businesses and

entrepreneurs

Number of Business

Today Training

sessions provided

10 training sessions per year,

with an average score of 60%

required in the post-training

assessment

14 training sessions have

been conducted, with an

average score of 69%

A total of 19 training

sessions have been

conducted, with an

average score of 79%

Number of

entrepreneurs who

successfully complete

business incubation

4 entrepreneurs in the final

incubation stage

3 entrepreneurs have

made it to the final

incubation stage

3 entrepreneurs have

made it to the final

incubation stage;

82 referrals have been

made to incubation centres

Number of Social

Facilitation Sessions

for NEF investees

10 Social Facilitation Sessions

21 Social Facilitation

sessions y

24 Social Facilitation

sessions

Conduct investor

education seminars in

provincial towns and

increase understanding

by participants

Number of seminars

held across the

country

16 Investor education seminars

per year

21 Sessions completed,

as well as 2 Industrial

Theatres

25 Sessions completed, as

well as 4 Industrial

Theatres

23

Strategic Objective 4: Financial Efficiency and sustainability

23

Optimising Non-Financial

Support

Output Performance Measure

or Indicator 2nd Quarter Milestones


Results

YTD Achievement

(Nov 2015)

Establish the

NEF as a

sustainable DFI.

Percentage of portfolio

impaired 19% 21% 21%

Target ROI before

impairments (to be

reviewed annually)

9-10% 9% 9%

Collections ratios 80% 96% 95%

Manage portfolio risk High risk clients: <35% High risk clients: <31%

High risk clients: <29%

Market Failures &

NEF Investment Funds

24

Challenges / Market Failures

• Limited own capital;

• Limited management skills, including financial,

marketing and technical expertise;

• Lack of accurate and reliable financial information;

• Poor quality of business plans;

• Lower bargaining power and strong competition

from established businesses with entrenched

market dominance;

• Inadequate access to affordable capital; and

• Lack of access to local international markets.

25

The NEF has a

comprehensive

solution for

each of the

market failures

outlined above.

26

Funding Across the Economic Spectrum

Fund Focus Threshold

1 iMbewu Fund

(SMEs)

SME Fund providing

Entrepreneurship,

Procurement & Franchise

Finance

R250 000 –

R10 million

2

Women

Empowerment

Fund (WEF)

Achieve minimum 40% of

enterprises owned and

managed by black women

R250 000 –

R75 million

3

Rural &

Community

Development

Fund

Supporting rural economic

development through New

Ventures, Acquisition,

Expansion & Greenfields

Finance

R1 million –

R50 million

4 uMnotho Fund

Funding of New Ventures,

Acquisition, Project Finance,

Expansion, Capital Markets,

Liquidity & Warehousing

R2 million –

R75 million

5 Strategic

Projects Fund

Early-stage investment in

industrial / manufacturing

transactions

Up to R75

million

5

specialist

funds

27

Growing Black Industrialists

SPF Mandate

28

Strategic Projects Fund (SPF) A unit of the NEF established with a mandate to increase

the participation of black people in early-stage projects

Aligned to national Government policy.

Seeks competitive opportunity for the South African

economy and the inclusion of black participation in

opportunities at the outset of projects, as opposed to doing

so during equity closure

Development and Economic Impact

• Creation of new manufacturing and industrial

capacity

• Creation of new jobs as opposed replacement

capital finance

• Investment of new fixed capital into

economically depressed areas or poverty

nodes

• Creation of an inclusive economy by increasing

South African participation

• Increase RSA export earning potential and

reduce import dependency

• Increase co-investment and linkage with

foreign direct investment

29

Creating Black Industrialists

Strategic Industrial Sectors

RENEWABLE

ENERGY

MINERAL

BENEFICIATION

AGRO-

PROCESSING

INFORMATION &

COMMUNICATIONS

TECHNOLOGY

INFRASTRUCTURE TOURISM

Biofuels

Biomass

Biogas

Solar

Wind

Hydro

Mining &

Mineral

Beneficiation

Chemicals

Agriculture

Telecoms

Broadcasting

Roads

Dams and Bridges

Sewer and Bulk

Services

B&Bs

Hotels

Guest

Houses

(Women-

owned)

Real Estate

Together with local & international partners the NEF has developed 20 strategic and

industrial projects worth R27bn, with the potential to support over 80 000 jobs.

The NEF’s future equity rights will total R4.2bn at financial close.

30

Beneficiation Project Life Cycle

31

SPF Portfolio – NEF Equity Rights

32

Project Current NEF

Equity Total Project Size NEF Future Equity

Rights Province Sector

RMI 30% 15 000 000 000 2 250 000 000 Western Cape Mineral Beneficiation

SA Metals 29% 1 950 000 000 282 750 000 Mpumalanga Mineral Beneficiation

Coking Coal 85% 500 000 000 212 500 000 Limpopo Mineral Beneficiation

Silica 50% 1 500 000 000 375 000 000 Gauteng Mineral Beneficiation

Coconut Water 49% 50 000 000 12 250 000 Gauteng Agro-processing

Busamed Hospitals 49% 1 600 000 000 392 000 000 GP/FS/WC Healthcare

Milk for Life 49% 50 000 000 12 250 000 Limpopo Agro-processing

Link Africa 30% 1 000 000 000 150 000 000 KwaZulu Natal Infrastructure

Mkhondo Biorefinery 49% 800 000 000 196 000 000 Mpumalanga Renewable Energy

Tyre Energy Extraction 68% 50 000 000 17 000 000 Eastern Cape Renewable Energy

KC Energy 40% 150 000 000 30 000 000 KwaZulu Natal Renewable Energy

Tyre Manufacturing Research 100% 335 000 000 167 500 000 KwaZulu Natal Manufacturing

MIBT 49% 30 000 000 7 350 000 Gauteng Manufacturing

Kenako Medical 85% 200 000 000 85 000 000 Eastern Cape Manufacturing

Mabele Fuels 22% 2 155 000 000 237 050 000 Free State Renewable Energy

Inkomati Mineral Resources 31% 100 000 000 15 450 000 North West Mineral Beneficiation

Hollow Fibre Dialyser 49% 250 000 000 61 250 000 Gauteng Manufacturing

Kraalbos 0% - Western Cape Manufacturing

Textile Industry Research 100% - National Manufacturing

SA Luxury Emporium Group 49% 50 000 000 12 250 000 Western Cape Manufacturing

Jozini School 45% 25 000 000 5 625 000 KwaZulu Natal Infrastructure

Cape Point Film Studios 22% 715 000 000 80 080 000 Western Cape Infrastructure

iVac Bio 74% 55 000 000 20 350 000 Gauteng Manufacturing

Totals 26 565 000 000 4 621 655 000

SPF Achievements Since Inception

33

High risk investments - NEF only DFI with fully Venture

Capital (VC) capability and offering focused on participation

of black people in project development;

Equity investments - typically with 7-10 years investment

horizon;

Circa R800mn approved to date which has leveraged R4bn

in external funding;

78% of projects at financial close, construction or operational

stage

3, 600 actual jobs created and

80,000 direct and downstream jobs to be created by the SPF

Portfolio

34

Recapitalisation & NEF’s

Financial Position

35

"Fellow South Africans, we have to work more

intensively to develop emerging or black

industrialists. Many of the aspirant black

industrialists complain about the difficulties

they experience in obtaining industrial

finance, supplier and retail markets, and

technical production support. The National

Empowerment Fund, the Industrial

Development Corporation and the Small

Enterprise Finance Agency will continue to

provide finance to viable black-owned

businesses to promote industrialisation.

In addition, we encourage established

businesses to support the development of

black industrial businesses."

Presidential Injunction

In the State of the Nation Address (SONA) on 13 February

2014, H.E. President Jacob Zuma stated as follows:

Dangers of not recapitalising the NEF:

1. Weakens public trust in Government’s

commitment to B-BBEE.

2. Will result in a funding crisis for black

entrepreneurs.

3. Has led to staff attrition and institutional

memory leakage.

4. Threatens the potential collapse and

closure of a high-performing organisation.

5. Undermines the historical obligation and

importance of transforming the economy.

6. Emboldens private sector’s disregard for

the transformation imperative.

7. Constitutes a political risk for the State.

1. In 2004 Government

promised to fund the NEF to the tune of R10bn “over the next five years”.

7. Efforts to obtain support from the Jobs

Fund in 2013.

8. Project Kopano initiated in June 2014: “business combination”

talks with IDC.

9. Current efforts: MTEF, IDC, UIF, PIC

& MTN Asonge Futhi.

2. Trust capital of R2,47bn awarded between 2004 & 2010, and R1bn raised from equity in

MTN through Asonge Share Scheme in 2007.

6. Temporary Moratorium from 1

May 2013 to 29 April 2014.

3. Operating expenses supported through the dti

transfers of R322mn over a 5 year period up to 2010.

4. Applications for recapitalisation

through the MTEF in 2012, 2013, 2014 &

2015.

5. Applications for reclassification & Limited Borrowing Rights in 2012 &

2013.

Journey of NEF Recapitalisation

36

37 37

NEF Capital Requirements

In order to meet the growing

demand for business funding

from black entrepreneurs

countrywide, the NEF requires

an annual allocation of R2

billion over the next 5 years.

38

Project Kopano The NEF and IDC (supported by the dti and EDD) have been

engaged in a process to find sustainable and long-term

recapitalisation for the NEF.

This project is referred to as “Project Kopano” and commenced in

July 2014.

The NEF was motivated by the need to respond to President Jacob

Zuma’s State of the Nation Address of 17 June 2014, which had

stated as follows: “The total assets of our Development Finance

Institutions amount to some R230 billion. However, their

impact on development is not sufficiently broad-based and

their investment programmes are not well coordinated. The

institutions will be repositioned in the next five years to

become real engines of socio-economic development.”

The process assessed various structural options to coordinate and

strengthen the investment programmes of the two DFIs.

39

Project Kopano – Option Analysis The options that were considered for the business combination are the

following:

Continue as is – NEF remains a separate entity but products and services of the NEF

and IDC are rationalised to eliminate overlaps. The NEF remains a trust and IDC

advances a facility to the NEF

Arms length subsidiary – the NEF’s assets and business is transferred to a

company which is a subsidiary of the IDC. NEF has a separate board,

management and support structures. This option has various advantages

including the fact that NEF continues as an independent entity focussing on BEE

Closely managed subsidiary – NEF re-established as IDC subsidiary. IDC Exco

becomes NEF board. NEF management and support integrated into IDC. In this model

the IDC manages the NEF and drives its strategic direction. This poses a risk of IDC

strategy trumping the NEF BEE mandate

NEF as division of IDC – NEF ceases to exist and IDC takes over NEF business. IDC

suggests that it creates a “targeted mandate” with its own brand. This will result in

dilution of the BEE mandate and termination of some of NEF BEE products.

Complete merger into IDC – NEF terminated and IDC fulfils BEE mandate (similar to

above option but no separate branding). The focus on BEE as sole mandate falls

away.

Project Kopano

The NEF and the dti have recommended that the second

option (arms length subsidiary) in the previous slide be

implemented.

In this option the NEF remains focussed on B-BBEE and

has an opportunity of increasing developmental impact as a

result of recapitalisation from IDC.

The board provides guidance to NEF on direction and IDC

focusses on its mandate of industrial development.

the dti as custodian of B-BBEE legislation and policy in the

country continues to maintain oversight over NEF as

implementation agent of such policies

The mandate of the NEF would continue as is, undiluted.

40

Projected Unencumbered cash position

41

Notes:

• Actual cash to date

at R1.32 billion

• R683 million

uncommitted cash

at hand

• NEF projected to

fully fund 2015/16

activities

(assuming all

settlements in

pipeline

materialise)

• To discharge

2016/17 strategy,

R1 billion would be

required as cash

injection

NEF Capital

42

Cash Funds received from the Dti R 2 297 431 472

Investment in listed shares at cost R 171 000 000

Total Trust Capital R 2 468 431 472

Accumulated Surplus (as at 31 Mar 2015) R 3 382 715 622

Net Asset Value R 5 851 147 094

43

Notes:

1. The decline in NEF mainly driven by self imposed funding and headcount moratoriums. The Board’s targeted range to manage this ratio in long term is 54%-58%.

2. DBSA enhanced income lines (37.5% up) and managed costs down through the restructuring (27.8% down) to get 2014 results. These levels are potentially not sustainable.

3. IDC has been trending down over the years but still over 60%

4. Business Partner as a privately owned funding entity still has averaged about 55% over the period.

5. sefa’s 2013 ratio is reduced by grant funding transfers made in that year. Otherwise the income generation is not yet at level of adequately covering the cost base.

Efficiency Ratios

Entity 2014/15 2013/14 2012/13 2011/12

NEF 46.9% 49.2% 59.0% 56.4%

DBSA 29.8% 56.9% 56.6%

IDC 62.5% 67.6% 68.7%

Business Partners 59.6% 55.7% 47.7% 55.7%

sefa 151.1% 38.1% 96.0%

The efficiency/ cost to income ratio of the four DFIs and one private funder over a three year period is as follows:

Detailed Life to date Performance

Update as at 30 September 2015

44

NEF Approvals & Disbursements

by Value

45

0

1000

2000

3000

4000

5000

6000

7000

Apr-03 -Mar-04

Apr-04 -Mar-05

Apr-05 -Mar-06

Apr-06 -Mar-07

Apr-07 -Mar-08

Apr-08 -Mar-09

Apr-09 -Mar-10

Apr-10 -Mar-11

Apr-11 -Mar-12

Apr-12 -Mar-13

Apr-13 -Mar-14

Apr-14 -Mar-15

Apr-15 -Mar-16

NEF approved & committed deals by value since inception to 30 September 2015

Value Approved ( R million) Committed Facility Value ( R million) Disbursement Value

6697

4972

4615

46

NEF Approvals & Disbursements

by Number

0

100

200

300

400

500

600

700

Apr-03 -Mar-04

Apr-04 -Mar-05

Apr-05 -Mar-06

Apr-06 -Mar-07

Apr-07 -Mar-08

Apr-08 -Mar-09

Apr-09 -Mar-10

Apr-10 -Mar-11

Apr-11 -Mar-12

Apr-12 -Mar-13

Apr-13 -Mar-14

Apr-14 -Mar-15

Apr-15 -Mar-16

NEF approved and committed deals by number since inception to 30 September 2015

Approvals Committed facilities

688

565

NEF Investment by Sector

47

Agro Processing, 6% Chemicals & Pharmaceuticals, 4%

Construction and Materials, 13% Distributors,

Dispatchers and Processors, 1%

Energy, 8%

Engineering, 5%

Financial Services, 1%

Food and Beverage, 5%

ICT, 3% Manufacturing, 8%

Media, 6%

Mining Industry, 3%

Motor Industry, 1%

Printing and Publishing

Services, 1%

Property, 4%

Retail, 5%

Services, 14%

Tourism and Entertainment, 3%

Transportation, 7%

NEF Invested Portfolio by sector by value since inception - 30 September 2015

48

Invested growth across all provinces

1. As a national Development Finance institution (DFI) the NEF is

committed to ensuring that its products and services reach the

entire nation.

2. Since the launch of the NEF Asonge Share Scheme in July

2007 the NEF has implemented various measures and

interventions to strive towards an even, representative and

equitable distribution of its services across the country.

3. As a result, the NEF’s invested presence in Gauteng has come

down from above 60% of total disbursed funds in 2006, to 45%

by 30 September 2015.

4. This is not as a result of a reduction of funding in Gauteng, but

is a direct consequence of planned, targeted and increased

funding in the other 8 provinces because they are integral to

South Africa's economy, comprising 76% of the population.

49

Geographic spread of investments

GDP Source: StatsSA (November 2014); Gross Domestic Product, Third quarter 2013

(The GDP contribution by province has been updated with the most recent available

statistics from Statistics South Africa, in order to be able to match the performance to the

most current available statistics.

EC R414m

9%

FS R92m

2%

GP R2b 45%

KZN R782m

17%

LP R276m

6%

MP R184m

4%

NC R92m

2%

NW R92m

2%

WC R598m

13%

WC

NW

NC

MP

LP

KZN

GP

FS

EC 7.7

5.1

33.8

16.0

7.3

7.6

2.0

6.8

13.7

NEF Invested Portfolio by region by value (inception – 30 Sept ’15)

Gauteng, 9 Mpumalanga,

16

North West, 10

Limpopo, 12

Northern Cape, 8

Free State, 18

Western Cape, 5

Eastern Cape, 12

KZN, 15

Geographic spread of Incubation &

Entrepreneurship Training Entrepreneurial Training Seminars from April 2011 to date

Province Number of Training

Seminars Conducted

Gauteng 9

Mpumalanga 16

North West 10

Limpopo 12

Northern Cape 8

Free State 18

Western Cape 5

Eastern Cape 12

KZN 15

Total 105

The NEF currently has working relationships with 3 business incubation centres across the country, which

provide in-depth business support, training and in some instances assistance with access to markets, across

various sectors of the economy. To date over 2500 businesses have been referred for incubation and

entrepreneurship training to help take them to operational stage. At least 75% of the seminars were held in rural

and township areas. These incubation centres were mainly established or supported through direct Government

support, and their partnership with the NEF helps to maximise the impact that can be achieved through

Government spending.

50

51

Regional Offices 1. The NEF has regional office presence in all

provinces except the Northern Cape, which is

envisaged to be operational in Q4.

2. This national presence ensures that the NEF

reaches every area of the country including

the remotest rural areas, where the poorest of

the poor mostly reside.

3. The NEF always takes part in national (the

dti, EDD & DSBD), provincial and local

government roadshows, as well as various

other stakeholder events, to take its message

to the people.

4. It is as a result of this that the NEF has

successfully funded business ventures

through its Rural and Community

Development Fund, whose objective is to

unlock value in rural and township

economies.

Geographic Spread – Investor Education Investor Education campaign has been rolled out in the Eastern Cape, Northern Cape, Free State,

Limpopo, Western Cape, North West, KZN, Mpumalanga and Gauteng. Attendees: over 24 500

participants to date.

z

NORTHERN

CAPE

FREE STATE

LIMPOPO

KZN

EASTERN

CAPE

MPUMA

LANGA

NORTH

WEST

GP

WESTERN CAPE

52

Mafikeng, Lichtenburg,

Rustenburg,

Hammanskraal,

Vryburg, Taung

Klerksdorp,

Potchefstroom,

Marikana, Lithabile

Kimberley,

Prieska,Kakamas,

Keimoes,Upinton,

Kathu, Barkley West,

Kuruman

Saldanha, Langa, Bellville

Nyanga, Mannenburg /

Gugulethu, Worcester,

Caledon, Cornville –

George, Kwanonqaba-

Mossel Bay

Port Elizabeth, East London, King Williams

Town, Mount Frere, Butterworth, Umtata,

Fort Beaufort, Grahamstown

Bloemfontein, Botshabelo,

Welkom, Thaba Nchu, Qwaqwa,

Kroonstad, Ladybrand,

Bethlehem

Seshego, Lebowakgomo, Lephalale,

Bela-Bela, Thohoyandou, Giyani,

Phalaborwa, Tzaneen, GaKNkoane,

Mokopane

Newcastle, Dundee,

Ladysmith, Estcourt,

Pietermaritzburg, Port

Shepstone, Newlands East,

Chatsworth, Umlazi. Kwa

Mashu, Ulundi, Richards

Bay,Harding, Gamalake

Springs, Alexander

Soweto, Diepsloot Ext

2, Soshanguve,

Mamelodi West,

Krugersdorp Kagiso 2,

Sebokeng

Delmas Botleng,

Secunda,

Ermelo, Piet Retief

Emalahleni,

Middleburg,

Mbombela, Hazyview,

Carolina, Groblersdal

NEF booklet on how to

save and invest

NEF Investment Process

53

* Please note that applications are not necessarily linked to enquiries

NEF INVESTMENT PROCESS

Since Inception - 30 September 2015

688worth R6.697billion

565worth

R 4.972 billion

Approx. 65 668 17 130

Enquiries Applications Approved transactions

Committed Facilities

R 4.615 billion*

Disbursements

54

Women Empowerment

31 March

2011

31 March

2012

31 March

2013

31 March

2014

31 March

2015 31 Sept

2015

47% 21% 21.5% 21,5% 26% *43%

Investors 86 000

Amount R1,3 billion

Women by number 49%

Women by value 43%

Fund a Woman, Fund a Nation

*Percentage on annual disbursements

Job Creation Cumulative job opportunities created since inception:

55

31 March

2012

29 000 jobs opportunities

31 March

2013

40 000 jobs

opportunities

31 March

2014

47 000 jobs

opportunities

31 March

2015

*81 000 jobs

opportunities

31 Sept

2015

83 000 jobs

opportunities

Geared to created 99 000 over the next 3 years *In 2014/15 the PRASA deal

alone was geared to support

31 121 job opportunities

55

56

Thank you Contact Details

www.nefcorp.co.za

WHERE TELEPHONE

1 Head Office,

Johannesburg

011 305 8000 or 0861843 633 /

0861 THE NEF

2 Eastern Cape 0861 633 327 / 0861 NEF ECP

3 Free State 0861 633 377 / 0861 NEF FSP

4 KwaZulu Natal 0861 633 596 / 0861 NEF KZN

5 Limpopo 0861 633 546 / 0861 NEF LIM

6 Mpumalanga 0861 633 678 / 0861 NEF MPU

7 Western Cape 0861 633 927 / 0861 NEF WCP

8 North West 0861 633 697 / 0861 NEF NWP

9 Northern Cape 0861 633 627 / 0861 NEF NCP

57

A Sample of NEF Investees

58

Infrastructure & Manufacturing BUSA MED

Location National

Project Development Stage Operational & Construction

NEF Investment to date R260 million

NEF Equity 49%

Project Promoter Goldenwood Pty Ltd

Projected Financial Close Requirement R1.6 billion

NEF Return Expected (December 2015) R196 million (IRR = 15%)

BusaMed is the first black-owned private hospital group to compete with the

big three. The group’s vision is to be a consolidator of the fragmented health

care market. This will be kick-started with the commercialisation of 4 hospital

licenses with 630 hospital beds, spread over three provinces, Gauteng, Cape

Town and the Free State. The aim is to develop centres of excellence, which

will provide world-class services. The first hospital, a cardiology centre in the

Western Cape (Strand) is currently operational. Ground has been broken for

the second hospital in Gauteng, a sports science centre, and financial close

should be reached soon on the last two in Harrismith and Bloemfontein.

59

Infrastructure & Manufacturing LINK AFRICA

Location National

Project Development Stage Operational


NEF Equity 30%

Project Promoter Link Africa Pty Ltd

Projected Financial Close

Requirement

R1.1 billion

NEF Return to Date

R50 million (IRR = 7%)

R9 million (Expected 12/2015)

The business is positioned to deploy Last Mile Fibre Optic cables

across the country. It employs patented technology which can be

deployed four times faster at less than half the cost of normal fibre. The

fibre is laid out inside existing sewer and other currently existing

infrastructure as opposed to the normal method of digging up trenches

to lay fibre optic cables. An initial capital investment of R300 million

has led to the establishment of a well positioned South African Last

Mile Fibre Optic Infrastructure Company, Link Africa.

60

Renewable Energy Projects

MABELE FUELS

Location Bothaville, Free State

Project Development Stage Financial Close


NEF Equity 11.76%

Project Promoter Mabele Fuels Pty Ltd


Jobs 16 700

The project intends to develop a fuel grade bioethanol plant, in Bothaville, in

the Free State Province. With capacity to produce about 154 million litres per

annum, the plant feedstock is grain sorghum. The production methodology

involves a process utilising grain milling through to starch conversion to

sucrose as well as fermentation and drying that ultimately culminates in the

production of saleable bioethanol.

Development impact of Project

A high job creator with an estimated cost per job relatively low

at approximately R149,700;

Use of agricultural outputs in project creates opportunities for

community ownership through community trusts and/or

employee ownership schemes;

Opportunity for rural socio-economic development;

A green environmentally friendly alternative to the

conventional use of fossil fuels;

Provides for greater fuel security in countries such as South

African with no oil reserves;

61

MABELE FUELS Cont.

PROJECT WAITING FOR FINALISATION OF REGULATORY

FRAMEWORK

62

Healthcare & Manufacturing

KENAKO MEDICAL

Location Coega IDZ, Eastern Cape

Project Development Stage Financial Close


NEF Equity 70%

Project Promoter Kenako Medical Pty Ltd

Projected Financial Close Requirement R180 million

Jobs 108

Kenako intends to develop the sole manufacturing plant of normal and safety syringes in the SADC region. The plant will initially produce a total of 250 million syringes and 200 million hypodermic needles per annum. The NEF commenced with a R7.2 million feasibility study funding in 2013 and gave a hands on approach in assisting the Black Industrialist in bringing the project to bankability. Earlier this year the NEF made a further commitment towards the construction of the plant bringing the NEF’s total investment to R75million.

.

Development impact of Project

Specialised skills transfer for the operation and

maintenance to Kenako staff;

Import Replacement: Kenako will be the sole

manufacture of syringes and needles in South Africa

with a potential to replace 20% of imports into the

South African and SADC syringe markets;

NEF’s equity to be warehoused for the future benefit of

B-BBEE entities; Kenako is currently 100% black

owned;

Strategic Sector Alignment with IPAP2 and the

investment will be supporting a capable black

industrialist;

Geographic Diversification: The project will be based

at the Coega IDZ in the Eastern Cape, increasing

investment in this economically depressed region.

63

KENAKO MEDICAL Cont.

Support needed for the Project

Partial Designation of government procurement of

syringes by Department of Health in order to secure

sales for Kenako;

Allow for exceptions to the generic requirements for

designation by ITAC in projects of strategic nature

such as Kenako;

Expedite SAHPRA Regulation for medical devices in

particular syringes to lower influx of poor quality

imports;

Assistance in obtaining grant funding for international

product certifications i.e. FDA, CE etc. ;

64

KENAKO MEDICAL Cont.

65

Mineral Beneficiation Projects SA METALS EQUITY

Location Witbank / Rustenburg

Project Development Stage BFS


NEF Equity 29%

Project Promoter

Global Remediation and

Resources Recovery (Pty)

Ltd (“GR3”)


Jobs 1 360

The SA Metals (Pty) Ltd (SAME) project aims to establish a US$200

million pig iron production plant in the North West or Mpumalanga

Province. The project runs with a projected goal to produce

approximately 500,000 metric tons (mt) per annum of Pig Iron together

with Titanium and Vanadium slags as by products. Delays in securing

feedstock supply and land lease agreements due to Evraz Highveld

Steel & Vanadium (EHSV) being placed under business rescue.

Rural & Community Development Fund

Portfolio Investment Impact

Note:

a Total project investment unlocked through investment by the Rural

and Community Development Department

b Total Investment undertaken by the Rural and Community

Development Department

c Total beneficiaries from the approved and invested portfolio

undertaken by Rural and Community Development Department

d Portfolio average effective shareholding held in projects is 75.75% B-

BBEE owned

e Investment has empowered these beneficiaries arranged in various

legal entities, i.e. Trusts, Co-operatives, etc.

f Effective Historical women beneficiaries in a community structure

through an investment undertaken by the NEF is 60%.

Project Value Amount Invested Area Population Effective Shareholding

in % Male Female

1 366 561 583 973 2 460 982 75.75% 1 006 937 1 454 045

a b c d e f

R'000

RCDF Portfolio Investment Impact

Gender Breakdown

66

67

Investee Stories

Building the Economy,

Sharing the Wealth

Pyratrade (Pty) Ltd – R15m

Pyratrade is a 100% black-owned castor oil

processing plant located in Hammarsdale,

KZN. The castor oil processing plant is

designed to handle 60 tons per day. Products

from the plant are: Castor Oil and Cake Meal

(Fertilizer).

WS Lloyds Limited is the 100% off-taker for

the castor oil. The business is a start-up and

will create 40 permanent jobs. The

Department of Agriculture in KZN is in full

support of the project and will assist with the

identification of Land Reform Farms in order

to plant castor beans for the project.

68

Investee Stories


Sharing the Wealth

Berlin Beef (R27 million)

The NEF invested a total of R27 million towards

the establishment of a feedlot in Berlin Beef

(Eastern Cape) for the supply of a high through-

put abattoir in East London in terms of a 10-

year off-take agreement, including upstream

investment in the cattle supply region for

improved breeding of cattle supplied to the

Berlin Beef feedlot.

The feedlot will have a standing capacity of

6000 heads of cattle and this capacity has more

than doubled in the first year of operation.

The project has adopted and complies with

requirements of ISO 14001, a globally

recognised standard specification that

structures the implementation of an effective

environmental management.

69

Investee Stories


Sharing the Wealth

Itera Trading (R5 million)

Itera Trading is based in Phuthaditjhaba in

the Free State Province and has been

operating since 2008. Itera Trading is a

100% black-owned, controlled and

managed manufacturing entity operating in

the Textile Industry. The clothing factory

was established to service blue-chip

retailers such as Ackermans and Mr. Price

by providing denim related products for kids

as well as adults.

Through NEF funding Itera Trading will

embark on an expansion programme to

cater for the rise in demand for locally-

produced products.

The expansion will result in the retention of

119 jobs and create additional 67 jobs.

Bakwena Ba Mogopa Mineral Resources

is a community owned operation located in

the Bethanie area of North West on a 700

ha farm surrounded by gabbronorite

reserves. The operation is involved in the

quarrying of gabbronorite dimension stone

blocks that are used mainly for their

aesthetic appeal in construction, home

decoration and monumental markets.

Bakwena Ba Mogopa Mineral

Resources (Pty) Ltd (R35 million)

Investee Stories


Sharing the Wealth

70

Umlazi MegaCity is neighbourhood shopping

centre that is 25% owned by the Umlazi

community due to funding commited by the NEF

a few years ago. The NEF committed about

R51.8mat development stage of the centre

seven years ago. Tis investment was used to

warehouse 37% stake in the shopping centre

for the community. The centre has over the

years proved to be a sustainable business.

It is anchored by Super Spar, Woolworths, Jet

and Mr Price. The centre has excellent

accessibility and enjoys good visibility from the

M30 Mangosuthu Highway immediately

opposite what was the Durban International

Airport. It currently comprises 34,770m2 of gross

lettable area, 783 parking bays and 60 taxi

bays. Umlazi MegaCity - (R51.8m)


Sharing the Wealth

Investee Stories

71

Rhino Ridge is a newly constructed lodge of

contemporary design with overtones of organic

forms utilizing natural finishes and materials.

Rhino Ridge is part-owned by the local

Mpembeni Community. The lodge offers 22

rooms nestled in natural bush high up on the

ridge with commanding views of the landscape.

The Lodge is situated on the western boundary

in the first private concession within South

Africa’s oldest proclaimed Game Reserve

Hluhluwe uMfolozi Park, Northern KwaZulu

Natal. Set in a 96 000 hectare park the Lodge

enables guests to enjoy 4 star luxury at a

private lodge for the first time within the park,

offering spectacular scenery and excellent

safari opportunities within the heart of Big 5

territory.

Rhino Ridge Safari Lodge (R20.5

million)


Sharing the Wealth

Investee Stories

72

73 73 73

Investee Stories

Some of the Franchises Funded to date

74

Khehlas Investments (Pty) Ltd is a company

that is 100% owned by Edward Mathabela.

The company acquired a license to operate a

Fish and Chips Co and Zebros franchise combo

in the Cape Town Station.

The outlet is strategically located because the

station is a main transit depot in the heart of

Cape Town where the main Bus Station and

Taxi Rank are also located. The Station is

estimated to see over 150 000 feet per day.

This is in addition to approximately 150 000

professionals and residents who work in the

immediate 1km radius of the location.

The Fish and Chip Co and Zebro’s franchises

are two of Taste Holdings’ (a publicly listed

entity) portfolio of franchised quick-service

restaurants.

Investee Stories


Sharing the Wealth

OBC Soweto (R5.8 million)

NEF funded the establishment of a OBC Chicken

Franchise in Soweto Power Park to the tune of

R5.8 million. The business is 100% black owned.

OBC Chicken is a full member of FASA since 2009

with its executive director currently serving on the

FASA board of directors. OBC Chicken is one of

South Africa’s fastest growing general retailers.

The business has been in existence for over 20

years with a footprint of over 50 stores

The business will be located at Soweto City, which

is currently under construction near the Orlando

Power Station. The retail outlet is estimated to

start trading in February 2016.

Investee Stories


Sharing the Wealth

75

76

Investee Stories Afripotego IT and Construction (Pty) Ltd previously

trading as Ekurhuleni Women and Youth

Empowerment (Pty) Ltd is the brainchild of Ms Tsakani

Mudau, and was established in 2004 to empower

women in the IT and Construction industries. She was

invited on board by WDB Investment Holdings

(WDBIH), which believes in investing in women for

their self-sustainability.

Afripotego IT and Construction is one of the eleven

Regional Field Service Centres servicing National

Lottery Machines. The company has supported TM

Afrika Kopanang Business Enterprise since 2005 in

supplying building material to Cashbuild clients,

Women for Housing Project in Orange Farm, RDP

houses in Bramfischer and Orlando East, as well as

Hardware Stores in Soweto. The business is in the

process of supporting TM Afrika Kopanang. Afripotego

IT and Construction decided to diversify after seeing a

gap or business opportunity in construction,

transportation and the supply of building material.


Sharing the Wealth

Afripotego IT & Construction (Pty) Ltd

R2.75 million

77

Investee Stories

Skhomo Technologies is a 100% black owned

ICT consulting company with a vast experience in

the Information and Communication Technology

(ICT) sector. The company was founded in 2012

by Mr Vuyani Mawetu Matoti, an experienced

entrepreneur who started Skhomo Technologies

with own funds in 2012. Today, the company has

a staff complement of 17 employees, and has

successfully executed a number of ICT projects.

Skhomo Technologies was appointed to supply,

install and maintain thin client solution in

community libraries, in Ekurhuleni, as and when

required from 01 June 2015 until June 2017. In

order to execute the awarded contract Skhomo

Technologies approached the NEF for funding of

R1 500 000 to purchase thin clients and install

the system at various Ekurhuleni libraries.


Sharing the Wealth

ICT infrastructure (R1.5

million)

78

Investee Stories

Infancare Personal Products (Pty) Ltd is a 100%

black owned and managed entity established by

Mr Tebogo Shounyane. The primary nature of the

company’s business is that of medical waste

management. The business has its offices in

Parow, Western Cape and targets hospitals,

nursing homes, Laboratories, Funeral Homes,

Tattoo Shops and municipalities for business.

Infacare was awarded a contract by the City of

Cape Town to install and manage 3140 sanitary

units around the municipal area. The contract is

for the supply and servicing of Sanitary Disposal

Units in the facilities of the City of Cape Town

(CCT), The contract was valued at R3 570 000

over a three-year period commencing on 1 July

2015. The NEF provided funding of R830 000 for

the purchase of bins and working capital

requirements of the business.


Sharing the Wealth

Sanitary Waste Management

(R830 000)

79

Investee Stories Vuka Business Consultants CC (VBC) is a 60%

black-woman-owned business established in

2008. The business is 60% owned by Sesethu

Loyilane and 40% owned by Raka Hope. VBC

offers comprehensive construction design

services which include construction of new

homes, renovations, forensic assessment of

homes, design and project costing.

VBC was awarded a three year contract by the

NHBRC to conduct forensic engineering services.

The contract is a service contract for forensic

engineering assessment of subsidy housing

structures, beneficiary occupancy verification and

geotechnical assessment sampling and analysis

of soil integrity on which the houses were built. In

order to successfully complete work under the

contract, VBC approached the NEF for funding of

R2.3 million.


Sharing the Wealth

Geotech assessment and

forensic engineering

(R2.3million)

80

Investee Stories

Park Inn Polokwane is a development of the hotel that

required R175.4million funding sought from the NEF, IDC

and own contribution. 108 direct permanent jobs during the

hotel operations and about 400 indirect jobs during

construction will be created. Black equity ownership is

83%,and effective black woman shareholding is 30%.

The hotel is a 3 star graded hotel with 161 rooms, centrally

located in Polokwane. It is targeted at local, international

business and leisure travellers. It will offer all amenities

including restaurant, conference facility, spa and other

related facilities typical of a 4* up-scaling hotel experience.

The hotel will be managed by the owners together with Hotel

Manager (Rezidor) through a management contract.


Sharing the Wealth

Amazin Hotels (R45.8

million)

81

Africa Best 350 Limited (AB350) is based in the Eastern

Cape with its core business being public transport services.

The business transports over 5.7m of people per annum with

a total of 112 routes spread across eastern part of the

Eastern Cape. Currently, AB350 has 128 buses and

employs 420 permanent individuals. AB350 is 100% black

owned with 29% equity being held by black women.

The NEF was requested to provide a R12.3 million funding

facility in order to commission a new Bus Repair Centre

(BRC) in Mthatha. The set up costs are in the order of R23.6

million.

The investment rationale in BRC was based on the fact that:

there’s no BRC in Mthatha, the closest being 430km away;

100% black owned and managed; Creation of 40 permanent

jobs (direct) and 8 jobs (indirect); The BRC will partner with

local FET & Technical colleges and be used as the host for

students to gain experience.

AB350 (R12.3million)

Investee Stories


Sharing the Wealth

82

Investee Stories Gidani International (Pty) Ltd (GI) is founded by Prof Bongani

Augustine Khumalo. GI is a lottery operator with cross-

boarder reach having secured licences in Tanzania, Malawi

and Lesotho

The NEF allotted R48m in funds towards the acquisition of

equipment that will be exported (as well as intellectual

property) to Tanzania for the operations there.

The NEF has supported this venture due to the following

developmental Impact: Localization of equipment - Gidani

has designed and scoped equipment for local manufacturing

in Durban through Barrows and Pinnacle; Export Sector

focus and as well as to support the export of locally-

manufactured equipment and intellectual property. Given the

regulatory framework of gaming, the only way to grow

operator businesses is by supporting them to grow through

other markets.

Supporting African

integration through trade

GI (R48million)

83

Investee Stories

Colliery Dust Control (Pty) Ltd. develops and

manufactures the components for integrated dust

suppression systems used on continuous mining in

underground coal mines. Colliery Dust Control is a

South African based business and focuses on the

design, manufacture and supply of integrated dust-

suppression systems for various underground mining

applications.

The NEF provided funding to Business Venture

Investment towards the full acquisition of the business.

The main BEE partners are two black women, Ms

Thembi Chagonda and Ms Babalwa Geza. Ms

Chagonda is an HR specialist and her role is to drive

CDC’s Transformational Agenda, whilst Ms Geza has an

engineering background and is the company’s Deputy

Managing Director. The company supports 24 fulltime

jobs.


Sharing the Wealth

Colliery Dust Control (Pty)Ltd.

(R41 million)

PERFORMANCE REPORT: 2ND QUARTER 2015/16

Documents

Transcript of PERFORMANCE REPORT: 2ND QUARTER 2015/16