CELEBRATING BLACK BUSINESS EXCELLENCE BRIEFING ON THE NEF STRATEGY AND ANNUAL PERFORMANCE PLAN 2018/19 - Presented to the Select Committee on ...
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CELEBRATING BLACK
BUSINESS EXCELLENCE
BRIEFING ON THE NEF STRATEGY AND
ANNUAL PERFORMANCE PLAN 2018/19
Presented to the Select Committee on
Trade & International Relations
Ms Philisiwe Mthethwa
27 June 2018
Contents
Section Slide
1 About the NEF 3
3 Life to date performance milestones 8
4 NEF activity summary and sector analysis 14
5 Financial Analysis 24
6 Provincial Dynamics 28
7 Strategic planning framework & objectives 37
8 NEF annual performance plan 2018/19 41
9 Update on Project Kopano 54
10 Investee Stories 58
11 Thought leadership 77
12 Black Industrialist 89
2
About the NEF
3
NEF Mandate…
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 owned and managed
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-BBE
4
Funding across the economic
spectrum
Fund Focus Threshold
SME Fund providing
iMbewu Fund Entrepreneurship, R250 000 –
1
(SMEs) Procurement & Franchise R15 million
Finance
2 Women Achieve minimum 40% of R250 000 –
Empowerment enterprises owned and R75 million
Fund (WEF) managed by black women
3 Rural & Supporting rural economic R1 million –
Community development through New R50 million
Development Ventures, Acquisition,
Fund Expansion & Greenfields
Finance
4 uMnotho Fund Funding of New Ventures, R2 million –
Acquisition, Project Finance, R75 million
Expansion, Capital Markets,
Liquidity & Warehousing
5
5 Strategic Early-stage investment in Up to R75
Projects Fund industrial / manufacturing million
specialist
transactions funds
5
NEF’s performance and
investment criteria
“The Empowerment Dividend”
The assessment of impact is not driven only by financial
returns but by measurement in terms of “The Empowerment
Dividend” made up as follows:
• Broad Based Black Economic Empowerment
• Ownership, management control, employment equity etc.
• Black Women Empowerment
• Job Creation
• Growth Sectors
• Geographic Spread
• Investment Return
6
Non-Financial Support
Pre-investment
As the first-point-of-contact the unit provides product advisory services, manages the
online business-plan solution, manages the administration of applications, incubation
and entrepreneurial training.
Socio Economic Development
Empower black people in existing NEF transactions and other broad based groups
through various interventions such as promotion of saving and investments, social
facilitation, entrepreneurial training, investor education, corporate governance training
and market access for the acceleration of meaningful participation.
Post-investment support
Monitor investments, provide ongoing portfolio management, manage mentorship
support and collections as well as legal compliance
Turnarounds, Workouts and Restructuring
Rehabilitate distressed transactions and reduce impairments Through a combination
of measures including balance sheet restructuring, equity and /or working capital
injection, operational restructuring, introduction of a strategic equity partner and / or
turnaround specialist and business rescue.
7
8
Deployment of Trust Capital
Cash funds received from the dti R 2.3 billion
Investment in listed shares (MTN) at cost R171 million
Total Trust Capital R 2.4 billion
Net asset Value as at 31 March 2018 R 5.0 billion
Net appreciation in assets since R2.6 billion
inception
With the R2.4 billion total recapitalisation since inception, the NEF has more than
doubled its initial capital and delivered the following socio-economic benefits:
➢ Over R9.3 billion in approvals, R6.3 billion of which has been injected into the
economy.
➢ R3.4 billion approved for the empowerment of black women.
➢ Over 95 000 jobs opportunities supported.
➢ Provided financial and non-financial support to entrepreneurs across all 9 provinces
of the country
9
Life to date performance milestones
Output Achievements
1 Approvals • Approved 927 transactions worth more than R9.3 billion across the country
2 Disbursement • Approximately R6.3 billion has been disbursed to these companies since inception
3 Integrity • Secured clean external audit opinions for 12 years running
4 Supporting jobs • Since inception, the number of job opportunities supported is 95 798 of which 65 359 were new
• 26 strategic and industrial projects worth R29 billion, with the potential to support over 85 000
5 Industrialisation
jobs
• In a transaction worth over R1 billion the NEF Asonge Share Scheme made available more than
A culture of savings &
6 12 million MTN shares to over 87 000 investors comprising black individuals and groups. 49% of
investment
investors were women
• Reached over 40 000 people in villages and townships through 180 community seminars on
7 Investor education how to save and invest, personal financial discipline, shares, dividends, bonds, the property and
money markets
Entrepreneurship • Business skills training provided over 2 900 potential entrepreneurs who attended 164
8
training / incubation seminars from 2012 to date
• Opened 8 regional offices allowing us to invest 56% of our portfolio in the these regions
9 National footprint
since inception
10 Collections • Over R2.8 billion has been repaid by investees
• Since inception, RCDF invested over R238 million in six rural and township shopping centres
Rural & Community • The R238 million leveraged an additional R662 million co-investment by the private sector
11
Development • A total of 9,859 jobs were created with 5,087 of those being direct jobs and the balance indirect
during construction
10Human Capital
Qualification Statistics
Item Qualification Number
1 Chartered Accountants 17
2 Master’s degree 11
Engineers (additional 4 hold Masters 4
3 degrees)
4 Honours degree 20
5 Bachelors degree 46
6 LLB degrees (All Admitted Attorneys) 9
7 Diplomas 18
8 Certificates 33
9 Abet 3
Total 161
Average age of NEF *Head Count - Core vs Support = 2.3:1
employee is 38 years – No. Percentage
maturing organisation Core 111 69%
Support 50 31%
Total 161 100%
11Cash collected
Since inception, over R2.8billion collected cumulatively from loans
disbursed across the country, in black-owned and managed
businesses across virtually all sectors of the economy
12Projected unencumbered cash position
Notes:
• Actual cash at 31 March
was R1.1 billion
• R94 million uncommitted
cash at hand
• To manage 2017/18
strategy, approval targets
were reduced.
• However to discharge
2018/19 strategy, at least
R680 million cash will have
to be injected.
13NEF ACTIVITY SUMMARY & SECTORS
14NEF Investment Process
Deal Due Approval Legal Post
Screening
Origination Diligence Stage Stage Investment
▪ Proactive ▪ Pre-Investment ▪ Screened Report ▪ Up to R5m ▪ Loan ▪ Files
handed to
Marketing basic referred to approved by Agreements POIU– Allocated
evaluation Funds’ Due FM IC drafted in-house to Post IA
Diligence
Committees
▪ Investment ▪ Detailed ▪ DD performed ▪ Above R5m ▪ Most equity ▪ Initial
hand over
team networks screening by based on nature recommended agreements also site visit thereafter
IA’s of deal to EXCO IC drafted in-house at least quarterly
▪Referrals from ▪ NEFOperating ▪ EXCO IC ▪ Legal
external Manual applied approves up to compliance by ▪ Regular risk
stakeholders (e.g. R15m FM IC ratings performed
deal originators, Management by POIA,
business minimum once a
incubation centers year.
& other
government
▪ Mentorship
agencies
provided
▪ Walk-in Clients ▪ Final
Investment ▪ Above R15m to ▪Funds disbursed
Paper reviewed R50m approved ▪ Collection with
by FM IC by Board IC Finance
▪ Credit
Risk ▪ Monthly
PMC
Assessment Meetings
Process
▪ Above R50m
approved by ▪ Distressed
Board of investments
Trustees transferred to
TWR
15 15NEF Activity Summary
NEF Activity Summary FYE 2018 FYE2017
Volume Volume % Value Value % Volume Volume % Value Value %
Approved 72 5% 527 127 5% 84 12% 844 500 10%
Approved but declined pre-commitment 2 0% 65 000 1% 1 0% 10 000 0%
Approved to existing projects 2 0% 44 000 0% 4 1% 11 900 0%
Conditional approval 2 0% 47 165 0% 0 0% - 0%
Currently at DD stage 53 4% 699 552 7% 35 5% 450 000 6%
Currently at application development stage 4 0% 39 562 0% 6 1% 9 450 0%
Currently at PreDD Stage 221 15% 1 306 987 12% 34 5% 188 000 2%
Currently at Screening 38 3% 946 300 9% 42 6% 1 214 057 15%
Declined after Pre DD 10 1% 377 800 4% 12 2% 378 000 5%
Declined at Screening 998 68% 5 882 402 55% 407 59% 4 449 940 55%
Declined at application development stage 25 2% 93 450 1% 32 5% 162 520 2%
Declined post DD 10 1% 189 200 2% 3 0% 67 500 1%
Withdrawn 36 2% 452 781 4% 33 5% 306 250 4%
Total 1473 100% 10 671 326 100% 693 100% 8 092 117 100%
Withdrawn; 2% FYE 2018 Volume
Currently FYE 2018 Value Approved but
at declined pre-
Currently at Screening commitment;
Declined post Approved; 5% DD stage; ; 3% Withdrawn; 4%
1%
DD ; 1% 4% Currently at Declined post Approved; 5% Currently at
PreDD Stage; DD ; 2% DD stage;
15% Declined at 7%
Declined at
application
application Declined development
development after Pre Currently at
stage; 1%
stage; 2% DD ; 1% Declined at PreDD Stage;
Declined at Screening; 55% 12%
Screening; 68% Currently at
Screening; 9%
Declined after
Pre DD ; 4%
16NEF Sector Analysis - Undisbursed
Commitment 2017/18
R'000 %
Energy 103 121 23%
Retail 2 753 1%
Transportation 1 262 0% Infrastructure
1% Retail
Services 19 420 4% Property
Mining Energy 1%
Food and Beverages 12 600 3% 11% 22%
3%
Construction and Material 23 309 5%
Agro Processing
Manufacturing 105 387 23% 15% Services
Automotive 150 0% 4%
ICT & Media 42 324 9%
Distributors, Dispatchers ICT & Media
and Processors 11 726 3% 9% Food and
Manufacturing Beverages
Agro Processing 69 621 15%
23% 3%
Mining 13 000 3%
Infrastructure 3 813 1% Distributors, Construction and
Dispatchers and
Property 48 800 11% Material
Processors 5%
Tourism & Entertainment 811 0% 3%
Total 458 097 100%
17Fuel Stations Portfolio Analysis
Disbursed Investment ▪ Collections rate of more than 90%
Risk Category Volumes Risk % facility received ▪ Low impairments of 6%
▪ 61% of disbursed amount repaid
Low Risk 51 85% R 222 614 462 R 147 429 977
▪ Success factors:
Medium Risk 4 7% R 15 506 900 R 11 884 271 Risk-sharing model with the oil companies
High Risk 5 8% R 38 672 141 R 10 549 200 ED funds from BP reduces weighted average
cost of capital
TOTAL 60 100% R 276 793 503 R 169 863 448 Aggressive valuation of acquired sites at 3 x
EBITDA
18Fuel Stations Portfolio Analysis
EXPOSURE PER VALUE
Approved Disbursed Debt balance to Total collected
facility facility date to date
R 447 516 326 R 422 720 510 R 270 336 735 R 236 071 255
- To date the NEF has already collected 56% of the disbursed portfolio
19NEF Property Portfolio
• The NEF has approved and committed 18 transactions as at 31 March
2018.
• Retail properties: 7
• Social housing: 1
• Tourism: 6
• Student accommodation: 1
• Affordable housing: 3
• Majority have been disbursed with the exception of two which are still
at CP collection stage (i.e. The Village Hub, Fanaye Business Enterprise).
• Two have been successfully exited (i.e. uMlazi Mega City & Mavundla Square)
• Four of the active transactions are still on moratorium (Amazin Hotels,
Matloasana Gardens, Ordicode, Halala Shopping Center).
• One is in exit process (Afri-Devo).
• Total committed: R 528m
• Total Disbursed Amount: R 476m
• Total Project Value: R1,825m
• YTD Receipts/Collections: R 261m
• Average Jobs Created: 6915 during construction & 5536 permanent
jobs
• The cost per job is R103k vs target of R580k/job
20NEF Construction Portfolio Analysis
Loan balance 31
NEF Loan
Name of Client CIDB Grading Region Total Disbursed Collections % Collected March 2018 (GL
Approved
Balance)
MOTHEO CONSTRUCTION GROUP (PTY) LTD 9GB 9CE GP 62 789 000 53 000 000 37 303 564 70% 37 554 194
SOLIDAIRE CONSTRUCTION 7GB MP 38 500 000 37 843 383 10 655 178 28% 36 056 523
White-Hazy Building Construction (Pty) Ltd 8CE PE MP 14 800 000 14 698 303 5 824 164 40% -
RIVERPORT BRICKWORKS CC GP 5 000 000 5 000 000 3 826 811 77% -
ZUFI INVESTMENTS (PTY)LTD 6EB PE GP 5 100 000 5 100 000 1 293 926 25% -
Chryselda Building Construction 8GB PE, 7CE PE, 6EP PE, 6EB
MPPE and 1ME PE
5 945 000 5 945 000 6 350 620 107% -
KWA DUMISANI ENTERPRISES KZN 7 330 478 6 906 656 4 338 098 63% 3 622 386
TAWANA BUSINESS PROJECTS (PTY)LTD 4GB PE GP 7 500 500 5 498 137 3 393 568 62% -
PMPZ CONSTRUCTION CC 6GB PE, 6CE PE KZN 7 634 192 7 255 348 - 0% -
C Pro Construction XXX GP 8 000 000 5 116 533 4 015 329 78% 1 459 795
Anix Trading and construction 7GB PE, 6CE PE EC 8 223 000 8 140 770 - 0% -
AHANANG HARDWARE & CONSTRUCTION CC (3) NC 8 750 000 8 750 000 9 251 231 106% -
EYETHU TRANSLODGE & PLANT HIRE 6CE PE GP 8 919 954 8 919 954 3 159 757 35% -
Polyzomba Contractors CC KZN 17 655 828 17 655 828 22 345 387 127% -
PATSA CIVIL WORKS AND CONSTRUCTION 6CE PE FS 9 962 752 9 962 451 5 288 516 53% 6 347 352
TTR BUILDING CONST 7CE PE, 7GB PE GP 10 000 000 10 000 000 7 538 425 75% -
QINISA CONSTRUCTION GAUTENG (PTY) LTD 9GB PE, 9CE PE EC 10 000 000 8 867 944 4 556 340 51% 5 819 242
MMQS CC GP 11 000 000 11 000 000 13 636 996 124% -
Nkolele Projects CC 7CE PE MP 11 000 000 9 741 759 2 300 000 24% 8 991 825
GA-MATLALA ROOF TILES AND BRICKS (PTY) LTD LP 11 660 000 11 607 016 328 703 3% 17 682 936
Mageba Projects 7GB PE, 4CE PE KZN 12 000 000 11 747 980 13 021 959 111% -
FM Crushers KZN 14 900 000 14 487 593 16 215 072 112% -
XJR CONSTRUCTION CC MP 14 985 000 11 070 361 11 538 953 104% -
NARE HOUSING PTY LTD WC 15 000 000,00 15 000 000,00 2 520 910,60 0,17 -
Other Various 209 946 434 198 341 813 96 310 565 49% 171 970 295
Total 536 602 138 501 656 829 285 014 074 57% 289 504 549
21Interventions and Recommendations
Interventions and key success
factors identified in the Recommendations
construction sector
• Appointment of a Technical Mentor ▪ Investees to procure the correct
such a qualified QS and project pricing systems such as
managers, s with expertise beyond Construction Computer Software
what the company possesses to (CSS) that assists entities in
execute the awarded contract; pricing projects more accurately
• The NEF setting up a joint and co- ▪ Investees should diversify the
managed bank account; services and product offerings so
• Cession of contract proceeds. as to avoid concentration on one
revenue stream
• The client should have a strong
debtors collection process; ▪ Investees to start insourcing other
▪ Where possible, co-release parts of the value chain such as
payments for acquisition of being their own material supplier.
material and other project related
payments
22NEF Investment Performance
Cumulative Approved ,Committed & Disbursed deals
by value since inception to 31 March 2018
Value Approved (R million) Committed Facility Value (R million) Disbursement Value (R million)
10 000
9 310
9 000
8 000 7 313
7 000
6 279
6 000
5 000
4 000
3 000
2 000
1 000
0 000
Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17
- Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar- - Mar-
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
23Financial Analysis
16
24NEF’s financial performance:
2010 - 2017
Explanatory notes overleaf…
25NEF’s financial performance:
2010 – 2017 cont
▪ NEF has consistently over the past eight years generated enough income each year to
cover credit impairment charges as well as fair valuation movements from its unlisted
investments. Total income after these impairment charges of R1.5 billion was in fact
generated over the eight year period.
▪ NEF has however had to fully fund its operating costs (which include non-financial support
programmes that are part of its mandate) over the years, resulting in a net reduction in
reserves of the eight year period of R61 million. The NEF therefore asserts that, as a
schedule 3A entity, if government had continued to fund its operating costs over this period,
the ‘so called’ capital erosion as claimed by the NT officials would not have materialised as
the full R1.5 billion value generated through its core mandate activities would have been
added to its balance sheet.
▪ To derive the net surplus/deficit reported in our annual reports over the year, there are
material annual fair value fluctuations from our listed shares, mainly MTN. These fair value
movements which cumulatively resulted in a R144 million reduction in reported surpluses
over the period, are completely outside NEF’s control as they are driven by other market
factors and the perceived risk of MTN as an entity. It should however be noted that if one
takes into account the same movements before changes made to accounting treatment,
these listed shares have resulted in a net R49 million appreciation in the NEF’s net asset
value over the period.
▪ It should therefore be emphasised that the net reduction in net assets between 2010 and
2017 of R61 million is purely due to the non-subsidisation of the operating activities of the
NEF as was envisaged when the NEF was formed by government.
▪ NEF last received operations grant from the dti in 2009.
26Portfolio Impairment Ratios
Entity 2017/18 2016/17 2015/16 2014/15
NEF 15.4% 17.55% 24.41% 19.08%
DBSA 5.06% 5.18% 4.87%
IDC 16.7% 16.9% 16.7%
Business Partners 8.87% 8.49% 6.6%
Sefa (direct lending) 67.0% Separate
disclosure
not provided
Notes:
▪ The NEF has made concerted strides to improve recoverability of the portfolio through
various post investment support of its investees. These include focused mentorship and
proactive turnaround, workouts and restructuring interventions.
▪ The 2017 ratio of 17.55% is therefore fairly in line with the average 17% on the IDC book.
IDC’s ratio has been averaging 17% over the period, which is not materially different from
current NEF levels.
▪ The DBSA and Business Partners low impairment provision levels is largely driven by the
high collateral requirements from investees.
▪ sefa’s direct lending portfolio is the most comparable to all other entities. At this point, the
ratio is a material outlier
27Provincial Dynamics
Striving for growth across all provinces
28Invested 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 44% by March 2018.
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 75% of the population.
29Geographic spread of investments
NEF invested portfolio by region by value since
NEF invested portfolio by region by value since
inception-31March 2018
inception 31 March 2009
KZN LP MP
6% 0% 4%
WC; 12% EC; 7%
FS; 2%
WC NW; 5%
16%
NC; 2%
MP; 6%
LP; 6% GP; 44%
EC
13%
GP
61%
KN; 16%
FS
0%
▪ The opening of regional offices across nine provinces has increased the NEF’s presence
▪ Gauteng proportion of the portfolio has decreased from 61% in 2009 to 44% in 2018
30Reasons for growth across all
provinces
Year Intervention Outcome
Every year present & exhibit in a growing number of local community
Local community &
1 2006 - 2015 workshops hosted by national, provincial and municipal governments, as
stakeholder workshops
well as various business and civic stakeholders.
Visited over 180 villages, townships and cities countrywide, and reached
2 2007 – 2018 Investor Education
over 40 000 participants.
NEF Asonge Share Attracted 87 000 investors (47% in GP, 16% in KZN, 9% in WC, 7% in LP,
3 2007 6% each in NW & MP, 4% each in EC & FS, and 1% in NC).
Scheme
26 strategic and industrial projects worth R29 billion, with the potential to
4 2007 – 2018 Strategic Projects Fund
support over 85 000 jobs
Proactively source transactions in rural areas in order to unlock underlying
Rural & Community
5 2008 – 2018 economic value. Since inception, RCDF invested over R238 million in six
Development Fund (RCDF)
rural and township shopping centres.
Placement of adverts and stories in local, regional and national media
Advertising & media countrywide. The media covered a variety of the work done by the NEF
6 2007 – 2018
coverage throughout the Provinces. 88% of the coverage was positive, 8% balanced
and 2% negative in tonality
Workshops in every province raising awareness on the online solution for
Business Plan &
7 2009 – 2018 developing own business plans with financial projections. From April 2017
Mentorship launch
to date over 2,000 business plans have been started.
4 destinations in each province promoting understanding of B-BBEE,
8 2009 – 2010 Eyethu Sonke Le BEE! funding & access to government & private-sector procurement & enterprise
development opportunities.
Opened 8 regional offices allowing us to invest 56% of our portfolio in the
9 2009 - 2018 Regional offices
these regions since inception.
Incubation & Business skills training provided over 2 900 potential entrepreneurs who
10 2011 – 2018
entrepreneurial training attended 164 seminars from 2012 to date
31Provincial Empowerment EXPOs
Objectives:
▪ Spread awareness of the mandate, products, services and milestones of the NEF.
▪ Maximise the NEF's invested presence across all Provinces.
▪ Disseminate information about funding, non-financial support, applicable regulations,
preferential procurement and enterprise development opportunities for black
entrepreneurs in the respective provinces.
▪ Deepen Public Private Partnerships among key stakeholders inclusive of Provincial
Governments, DFIs, SOEs, corporates, municipalities and other stakeholders for the
benefit of black entrepreneurs.
32
1746
Attendees
EXPOs
WC KZN
proposed
to follow to follow
for repeat
in 2018 in 2018
in 2018
32Mabele Fuels
Background Background
The project intends to develop a circa 154 ▪ Creation of a total of 16 700 jobs; with 636 direct
million litre per annum fuel grade bioethanol jobs during construction and 90 permanent jobs
plant. The plant feedstock is grain sorghum and
post project completion; with downstream jobs in
the production methodology involves a process
agriculture;
utilising grain milling through starch conversion
to sucrose as well as fermentation and drying ▪ Fixed capital investment of up to R50 million in a
that ultimately culminates in the production of poverty node namely; Bothaville, in the Free State
saleable bioethanol. Province;
▪ NEF’s equity is warehoused for the future benefit of
Location Bothaville, FS B-BBEE entities and Women Groups;
▪ Deployment of a pioneering biofuels technology in
South Africa in alignment with first world economies,
Project Development Stage Pre-Financial
and strategic government sectors and policies;
Close
o the project is very advanced with financial close
NEF Investment to date R61.75 million pending, subject to the finalisation of the Biofuels
Regulatory Framework;
Equity Shareholding 20% o the total project capital funding requirement has
been secured with all of the funding agreements
Project Promoter Mabele Fuels concluded; and sound financial viability.
(Pty) Ltd
Projected Financial Close R2.1 billion
Requirement Challenges
Total No. of Jobs to be Created 16, 700
▪ Mabele Fuels has concluded all legal agreements
and obtained the requisite approvals to commence
construction, except for the finalisation of the
Biofuel Regulatory Framework;
▪ Assistance is expediting the approval process for
the National Biofuel Pricing Regulatory Framework
is requested;
33Construction Portfolio
Analysis
▪ The Eastern Cape has a total approved loan book of R19,1million
where R17,9million of the funds approved were disbursed;
▪ The Eastern Cape loan book, accounts for 5% of the total approved and
disbursed loans in the construction portfolio;
▪ The collections that have been achieved by the investees operating in
the Eastern Cape is R4,3million;
▪ This amount represents 24% of the funds disbursed in the Eastern
Cape and 2% of the total disbursed loans;
▪ Impairment amounts to R15,1 million which represents 84% of the
loans disbursed to clients based and or operating in the Eastern Cape;
▪ The impairments in the region are only 4% of the total investment in the
sector;
▪ The impairments are mainly due to the following:
▪ Investee not pricing their contracts correctly (as most of them lack the
sophisticated systems and expertise within the management team)
▪ the investee’s customers (government departments) are not assisting
the investees in terms of making payment on time.
34Construction Sector Investees Examples
Inca Stutt Brick
▪ Inca EC was a cement brick manufacturer ▪ Stutt Brick is a clay brick manufacturer located
located in East London in King Williams Town in the Eastern Cape
▪ The business went into distress and ▪ Spending of allocated budgets by the Eastern
eventually into business rescue mainly due to Cape Government was slow and well behind
poor sales and to an extent, other schedule and there were therefore delays with
management related issues commencement of construction projects.
▪ The business was directly affected by the ▪ As a result, businesses such as Stutt Brick
slow-down of low-cost housing projects in the which could have benefitted from the
province, due to Government’s failure to pay Government spend did not gain the requisite
contractors timeously. benefit and this negative affected their cash
▪ This led to the closure of construction sites flows.
and a depressed construction sector in the ▪ The business eventually went into distress
province. due to poor sales and other management
▪ The business was subsequently taken over related issues.
by a non-BEE company while under business ▪ The business is still in the midst of a
rescue. turnaround process with a new management
company.
35Construction Portfolio
Analysis
o Building low cost housing with no o Building low cost housing with no
bulk works being done, thus delaying bulk works being done, thus
the project delaying the project
o Questionable ethics and inexperience o Questionable ethics and
of entrepreneurs inexperience of entrepreneurs
o Late payments of more than 60 days o Late payments of more than 60 days
affects the business cash flows affects the business cash flows
o Funding projects from municipalities o Funding projects from municipalities
that do not have money, with financial that do not have money, with
budgets being exhausted mid-year. financial budgets being exhausted
mid-year.
o Projects not properly priced by the
o Projects not properly priced by the
entrepreneurs
entrepreneurs \Unrealistic salaries
o Unrealistic salaries by promoters
by promoters
o Cross-subsidisation with projects not
o Cross-subsidisation with projects not
funded by the NEF
funded by the NEF
36Strategic planning framework &
objectives
37The strategic planning framework…
Broad Based Black Economic Empowerment
The Codes of Good Practice
Sectors
NEF
• Tourism; Biofuels; Construction;
Objectives
Objectives
Agri-processing; Transport; ICT & Media; Government Priorities:
NEF Act:
Mining services; Franchising
The dti
Industrial Policy Action Plan: 1) Acceleration of economic growth and transformation,
• Automotives, components, medium and creating decent work and sustainable livelihoods;
heavy commercial vehicles 2) Infrastructure development to achieve social and
• Plastics, pharmaceuticals and chemicals economic goals and rural development;
• Biofuels 3) Skills and human resource development;
• Strengthening linkages between cultural
4) Build a developmental state and improve public
industries and tourism
• Business process servicing
service.
NEF Sectors in line with national industrial objectives
38Key Strategic Objectives
• Provide finance to business ventures
established and managed by black people;
• Invest in black empowered businesses’ that
have high employment creating opportunities;
• Black economic empowerment is advanced
through commercially sustainable enterprise;
and
• Encourage and promote savings, investment
and meaningful economic participation by black
people.
39The NEF’s strategic outcome
oriented goals are to:
1. To provide finance to business ventures
established and managed by black people.
2. Invest in black empowered businesses that have
high employment creating opportunities
3. Support the participation of black women in the
economy
4. Facilitate investment across all provinces in South
Africa
5. Encourage and promote savings, investment and
meaningful economic participation by black people
6. Advance black economic empowerment through
commercially sustainable enterprises
7. Establish the NEF in the South African economy
as a credible and meaningful DFI
8. Establish the NEF as a sustainable DFI.
40NEF Annual
Performance Plan
2018/19-21
41NEF Strategic Plan 2018/19
Advance B-BBEE
Approval Targets:
2018/19 = R1.046bn
2019/20 = R1.331bn
2020/21 = R1.531bn
Maximise Empowerment
Financial Efficiency & Dividend
Sustainability
Support of job
Impairment Provisions 18%
opportunities:
ROI between 9% – 10%
2018/19 = 5 630
Collections ratio 80%
Growing 2019/20 = 7 169
Black 2020/21 = 8 388
Economic
Participation
Fund a Woman,
Creating Black
Industrialists Fund a Nation
Commercialise strategic 2018/19 = 40%
projects geared to support 2019/20 = 40%
85 000 jobs Promote a Culture of
Other imperatives
2020/21 = 40%
Savings & Investment
Host 45 Investor Objective Outcome
Education seminars per
year countrywide, in Geographic
villages & townships, on 1 Grow investments across all provinces
Spread
shares, dividends,
bonds, property & money Provide ongoing business-planning &
markets etc Sustainable
mentorship support, business &
2 Black
corporate governance training &
Businesses
incubation support
Reputation Entrench commitment to integrity among
3
management staff, investees and suppliers
42Advancing B-BBEE
Strategic Objective 1: Provide finance to business
ventures established and managed by black people
43Approvals & Disbursements
Approvals (R’m) Disbursements (R’m)
1 400 1 332 900
1 248 819
1 162 800
1 200 704 699
1 067
700 636
1 000 597
895 600 562
749 749 Moratorium
800 500
634 424 411
377
600 400
418 300
400
200
200 100
- 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018
Note:
• Financial year ends March
Targets over strategic Period in (R’m)
Year Approvals Commitments Disbursements
2018/19 1,046 839 915
2018/19
(Potential 470 387 422
revision)
2019/20 1,331 1,065 1,165
2020/21 1,531 1,225 1,363
44Graskop
▪ The project has developed the Graskop Gorge area into a major tourism node along the
Panorama Tourist Route in Mpumalanga.
▪ The development is setup in two major phases with developmental goals in each phase to
ensure adequate growth and continued sustainability over time.
▪ Phase1 has now completed and operational it features an outdoor lift system that ferry people up
and down off the cliff face into the forest environment below, where various elevated and ground
walkways allow visitors to explore the unique environment.
▪ Supporting this outdoor lift system is a newly constructed tourism centre that provide a multitude
of tourism products and services including a restaurant, bar, retail outlets, kids play area and
centre management offices that will support the entire development.
▪ The planning of the launch has commenced and dates will be communicated.
▪ Phase 2 of the project will include the development of a 90 Bed 4 Star graded Hotel. Project is
currently capital raising for the bankable feasibility study for Phase 2.
Location Graskop, Mpumalanga
Project Development Stage Phase 1 Operational
NEF Investment to date R33.4 million
Project Promoter Graskop Gorge Lift Company (Pty) Ltd
Total Project Size R85 million (ca. USD7,1 mil)
Phase 1 - 215 jobs
Jobs
Phase 2 - 42 Direct and 102 Indirect jobs
45Busamed
▪ Busamed is a Black-owned hospital group that competes with the big three.
▪ It aspires to be an innovative, quality-centred South African health care group,
advancing the provision of healthcare in world-class facilities with dynamic,
inclusive partnerships for all.
▪ The project was kick-started with the commercialisation of 4 hospital licenses for
630 hospital beds, spread over three provinces, namely Gauteng, Cape Town and
the Free State. Busamed also aims to develop centres of excellence, which will
provide world-class services.
▪ Since opening the initial four hospitals, the group has acquired three new hospitals,
bringing the total hospitals within the group to seven and total beds to 860.
Location National
Project Development Stage Operational
NEF Investment to date R260 million
Project Promoter Goldenwood Pty Ltd
Current Project Size R3.5 billion
Jobs 7 000
46Maximizing the Empowerment
Dividend
Strategic Objective 2: Invest in black empowered
businesses that have high employment creating
opportunities.
47
47Job-Creation since inception
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2011 2012 2013 2014 2015 2016 2017 2018
25 500 jobs 28 624 44 179 47 800 81 618 86 859 92 189 95 798
jobs jobs jobs jobs jobs jobs jobs
Targeted number of jobs expected to be created or supported
Year No. of jobs
Support 3 077 new or existing job opportunities (By Q4 the NEF had supported 3 609 job
2017/18
opportunities)
Support 5 630 new or existing job opportunities (potentially to be reviewed to 2 597 due to lack
2018/19
of resources)
2019/20 Support 7 169 new or existing job opportunities
2020/21 Support 8 388 new or existing job opportunities
48Cumulative Maximizing the
empowerment dividend
Strategic Objective 3: Support the participation of black
women in the economy
Annual target 2017/18
35% of disbursed
40% of disbursed funds
funds benefited
to benefit women
women
Targeted women ownership
Year Percentage of (Annual) Portfolio Disbursed
2018/19 40%
2019/20 40%
2020/21 40%
49Maximizing the empowerment dividend
Strategic Objective 4: Facilitate investment across all provinces in South
Africa
NEF invested portfolio by region by
value since inception as at 31 March
2018
2017/18
WC
13%
EC
8%
FS
2%
36% of disbursement were made in Northern
NW
NC 4% Cape, Free State, Limpopo, Mpumalanga,
MP 2%
5% North West and Eastern Cape.
LP
6%
GP
44%
Targeted Disbursements in under-represented
provinces (NC, NW, FS, LP, MP &EC)
KN
16% Year Percentage of Annual Disbursements
2018/19 25%
2019/20 25%
Decreased from
61% in 2009 2020/21 25%
50Optimising non-financial support
Strategic Objective 5: Encourage & promote savings,
investment & meaningful economic participation by black
people
2017/18
58 investor education seminars were held
Targeted number of investor education seminars held
across the country
Year No. of Seminars per year
2018/19 45
2019/20 45
20129/21 45
51Optimising non-financial support
Strategic Objective 6: Advance black economic empowerment
through commercially sustainable enterprises
Performance
Indicators 2017/18
Number of Business Today Training Sessions provided 19
Number of entrepreneurs who successfully complete
13
business incubation
Number of Social Facilitation sessions for NEF
49
investees
Targets
Indicators 2018/19 2019/20 2020/21
Number of Business Today Training
18 18 18
Sessions provided
Number of entrepreneurs who successfully
15 20 25
complete business incubation
Number of Social Facilitation sessions for
36 36 36
NEF investees
52Financial efficiency and sustainability
Strategic Objective 7: Establish the NEF as a sustainable
DFI.
Performance
Indicators 2017/18
Percentage of Portfolio Impaired 15.4%
ROI 8.3%
Collection Ratio 142.5%
Targets
Indicators 2018/19 2019/20 2020/21
Percentage of Portfolio
18% 18% 18%
Impaired
ROI 9%-10% 9%-10% 9%-10%
Collection Ratios 80% 80% 80%
53UPDATE ON PROJECT KOPANO
54Background
➢ 14 February 2017 Ministers signed the Memorandum for incorporation of NEF as
an IDC subsidiary.
➢ IDC and NEF have prepared a “Transitional Arrangements” document which will
govern the relationship of the parties during implementation phase which were
submitted to the Minister for approval
➢ IDC and NEF have established two structures to oversee process:
(i) Chairpersons and CEO’s Forum and
(ii) Executives Forum
➢ Executive Forum established workstreams to consider aspects of process:
(i) Strategy and Mandate Workstream – (Sefa included as part of this
stream);
(ii) Finance and Accounting Matters Workstream;
(iii) Legislative and Governance Workstream
55Update on Bridging Facility
➢ The IDC facility of R500m to the NEF has been approved by the IDC Board.
➢ The NEF is unable to fulfil three of the conditions precedent set by the IDC for
any payments that can be made to NEF:
(i) pledge of MTN shares and
(ii) Cabinet approval
(iii) NT s66 approval – Limited Borrowing Rights
➢ The incorporation of NEF as an IDC subsidiary is a “merger” in terms of the
Competition Act therefore the approval of the Competition Commission and
Tribunal are required for the merger to proceed.
➢ IDC and NEF have been working on a submission to the Competition
Commission, however, a filing fee of R350,000 is payable when submission is
made.
➢ The NEF financial reporting is in accordance with GRAP whilst IDC uses IFRS.
➢ Should NEF become an IDC subsidiary, the financial reporting will have to be
aligned.
➢ IDC and NEF started a process of facilitating the conversion of NEF reporting
from GRAP to IFRS by looking for a suitable service provider to assist.
56Thank you
Contact Details
WHERE TELEPHONE
1 Head Office, 011 305 8000 or 0861843 633 /
Johannesburg 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
www.nefcorp.co.za
57Investees stories
58Challenges/Market Failures
MARKET FAILURES NEF SOLUTIONS
Funding of between R250 000 and R75 million for start-up, expansion and
Limited own capital equity transformation purposes as well as use of concessionary facilities.
Non-descriptive on % of own contribution.
Limited management skills,
including financial, marketing Entrepreneurship Development tools and dedicated mentorship support.
and technical expertise
Competitive cost of finance with a higher risk appetite as well as
Access to affordable capital requirement for operational involvement (sweat-capital) reduces the need
for collateral payment.
Lack of accurate and reliable Dedicated pre-investment mentorship support and technical assistance
financial information with our partners.
Poor Quality Business Plans Collaboration with other Government agencies like seda, incubation,
entrepreneurial training and general pre-investment support and NEF
Online Business Plan-Tool Kit.
Lower bargaining and strong Linkages and emphasis on the implementation of the codes of good
competition power from practice (B-BBEE).
established businesses with
entrenched market dominance Wholesale Franchisor Facilities (Engen, Nandos, etc.)
Lack of access to local and Linkages with off-takers. Relationships with franchisors and corporates for
international markets access to markets.
59Medical Devices Manufacturing
JaLo Renal Izintso
The project seeks to
establish a Hollow
Location Dube Trade Port IDZ Fibre Dialyser
Manufacturing Plant
Project Development Stage Capital raising for FC.
with a capacity to
NEF Investment to date R50 million. produce 1 million
dialysers per annum.
NEF Equity 49%
The project will also
JaLo Enterprise Pty Ltd produce other
Project Promoter haemodialysis products
such as dialysates,
Projected Financial Close R240 million (ca. USD 20mil) dialysis kits etc. The
Requirement BFS is completed and
the project is capital
Jobs 60 (200 indirect) raising for financial
close to be reached.
60Social Infrastructure
Joyhouse Academy: Low Fee Independent School
The project has established a low fee independent school in
Jozini, KwaZulu Natal. The project is black woman owned and it
was founded 2006 by Ms Jabulile Nyawo from her own
resources. The school has grown from 84 enrolled learners in
2006 to a total of 214 learners enrolled from Grades R to 4.
Phase 1 construction was completed in March 2018 and it
envisaged that Phase 2 should be implemented in period of 24
months.
Location Jozini, KwaZulu Natal
Project Development Stage Operations
NEF Investment to date R15 million
NEF Equity 45%
Joyhouse Academy (Pty)
Project Promoter Ltd
Projected Phase 2 Construction R60 million (ca. USD
Costs 5mil)
Jobs 29 direct; 130 indirect
61Condom Manufacturing
GEMILATEX JV
Gemilatex aims to set up a male condom manufacturing plant
in South Africa. The manufacturing facility will be the first
majority black women owned condom manufacturing facility in
South Africa. It is envisaged that the facility will produce 70
million condoms and will supply South Africa as well as the
rest of the continent.
Location Eastern Cape
Project Development Stage Bankable Feasibility Stage
NEF Investment R6.6 million
NEF Equity 20%
Project Promoter Gemilatex Pty Ltd
Projected Financial Close R60 million (ca. USD5 mil)
Requirement
Jobs 131 Direct
62Transport: APM
▪ APM provides intercity passenger transport
services.
▪ APM started its operations with four rented/leased
buses before obtaining NEF funding.
▪ APM received R45m expansion finance from the
NEF.
▪ The company has sales offices in Pretoria,
Johannesburg and Durban.
▪ APM has 32 operating licenses for all the routes
envisaged in the business plan.
▪ Black ownership is 100% and includes black
women and youth.
▪ Through this investment, 30 jobs were retained
and 33 new jobs were created.
▪ Localisation: All NEF-funded buses were
assembled South Africa.
▪ Local content of body value is 31%, chassis is
19%. Average of 25%.
63Hospitality: Amazin Hotel
• Amazin Hotel is a 3 star Park lnn in Polokwane,
Limpopo.
• The NEF provided R45.8million towards the total
cost of R175 million. R108.2million is being funded
by the IDC, and R21million being provided by
sponsors.
• Hotel is well located next to a golf course and Peter
Mokaba stadium; within walking distance to many
professional firms & entertainment; 3–6km from the
CBD and the airport.
• BBBEE ownership is 83% (including the NEF
equity). Black woman shareholding is 30%.
• Created 508 job opportunities, 90% of these
employees is women,
• Operations started in February 2017, achieving
occupancy rate of over 40% against the projected
30%.
• Amenities include restaurant, conference facility, spa
and other related facilities typical of a 4* up-scaling
hotel experience.
64Construction: L&R Building and Civils
• L&R Building and Civils Construction (Pty) Ltd
(“L&R”) is a construction company that has been
operating since 2003.
• The business is 100% black woman owned and
specialises in social housing.
• Product and Service offering:
• General Building;
• Concrete Supplies; and
• L&R is expanding its services into civil engineering
• The NEF approved a R15 million working capital
facility.
• Key Highlights of L&R:
• Past projects to the value of R322 million since
inception;
• Confirmed order book to the value of R201,4million;
and
• Created and maintained 165 jobs where 134 are
temporary and 31 are permanent;
• Through assistance with the NEF funding has potential
of creating 10 new jobs.
• The business’ head office is based in Meyerton,
Gauteng and satellite offices in the Eastern Cape
and other site operations.
65Media: Beat FM and Rhythm FM
66Property Finance:Ordicode
▪ The project is a green field property development
with retail on the ground floor plus 8 storeys of
106 2-bedroom affordable housing units;
▪ The ground floor will be 100% let to Shoprite U-Save on a
20-year commercial lease.
▪ Project cost - R50.5m,
▪ R27.2m – NEF Senior Loans
▪ R 19.6m – GPF Junior Loans
▪ R4.3m – Sponsors Equity contribution
▪ The business is 100% black female owned,
controlled and managed;
▪ 8 direct permanent jobs and est. 343 indirect
jobs.
▪ The area is classified as an Urban Development
Zone (“UDZ”). Joubert Park, Johannesburg CBD
within 5 minutes walking distance to Park Station,
Gautrain Station, Metro rail and many other eco-
trans node amenities.
67Manufacturing: Chele Holdings
▪ Chele Holdings (Pty) Ltd is 100% woman owned by Ms. Palesa Chele, a 27 year old woman with sales
experience in toilet paper purchasing and supply.
▪ Ms Chele identified an opportunity to establish a new paper milling plant in Witbank, Mpumalanga after she
discovered that there is a gap in the market where most companies are manufacturing toilet tissues(finished
product) but there are few suppliers of recycled jumbo reels for the manufacturing of toilet tissues.
▪ The paper mill will produce jumbo reels from recycled paper, which can be sold to clients who in turn produce
final products, including but not limited to, toilet paper, sanitary towels, serviettes and other related products.
▪ The paper mills production capacity will be 250 tonnes per month.
▪ The NEF will support the creation of 14 jobs with an approved investment of R10 508 000 which will be utilised for
working capital and the installation and commissioning of the manufacturing plant.
Location Witbank, Mpumalanga
Deal Stage Start-up
NEF Approved
R10.5m
Amount
NEF Disbursed
R1.5m
Amount
100% Black and Female Youth-
Ownership
owned
Number of jobs 1 4 new jobs to be created
Product Entrepreneurship
68Retail: Pick ‘n Pay Spaza Shop
Conversion Programme
▪ PnP Conversion Programme is an initiative by Pick n Pay to revive township economies through the upgrading and
refurbishing of township supermarkets (“spaza shops”) This initiative created a partnership between the NEF, Western Cape
Economic Development (WCED), the Department of Small Business Development (DSBD) and Pick n Pay, where the said
parties will co-fund the establishment of spaza shop (Township Supermarkets) upgrades which have been identified by Pick n
Pay as part of Pick n Pay’s Spaza Shop Conversion Programme.
▪ This is in line with Government’s strategy to revive township economies. Retail was identified as one of the critical avenues
that can be used to boost township economies.
▪ Once a spaza shop is approved for the programme, Pick n Pay refurbishes, provides initial stock, business mentoring, back
office support and connects the stores with the Pick n Pay Group suppliers, where they enjoy preferential rebates. PnP also
closely monitors the performance of each of the sites and provides intervention when needed.
▪ NEF ring fenced a facility of R15 m for additional spaza shop conversions
Salient details
Location Western Cape
Deal Stage Start-up
NEF Ring-fenced Amount R15m
WC Govt Contribution R1.5m
100% Black & Female Youth-
Pick ‘n Pay Contribution
owned
Total Expected Investment 1 4 new jobs to be created
Product Franchise
69Services: Quickloc8
Quickloc8 (Pty) Ltd, pronounced “Quicklocate” is a 100% black owned entity that was established in 2015 by Mr Mbavhalelo
Mabogo. Mr Mabogo developed, tested and piloted a tracking device for motor vehicles with complete mobile capabilities
which operates from a smartphone based platform. Their main target market is the taxi industry. Mr Mobogo approached NEF
to raise finance to commercialise and to rollout the product to the target market
The device provides the following unique capabilities:
▪ real-time smartphone vehicle tracking and monitoring on the app with 3D maps;
▪ push notification for speed, ignition and driving style (harsh/economy driving) data;
▪ GPS location with real time speed;
▪ On/off-route alerts through geolocation features on the app, route analysis and replaying (total kilometres travelled/stopped
with addresses);
▪ ability to track and analyse driving style and performance of each driver and compare best drivers;
▪ Advanced antitheft system through combined auto geofencing and towing detection functionality;
▪ Bluetooth wireless connectivity features that allows owners to call drivers using through the tracking devices
▪ Smart crash detection that sends a message to owners immediately after accident.
Location Cape Town, Western Cape
Deal Stage Start-up
NEF Approved Amount R2.5m
NEF Disbursed Amount R1.3m
Ownership 100% Black Male-owned
Number of jobs 10 new jobs
Product Entrepreneurship
70Manufacturing (Textiles): Rise Uniforms
▪ Phakamile Industries CC t/a Rise Uniforms is 100% owned and managed by a black female, Ms Ntombekaya Nonxuba. The
business is a clothing manufacturing company that specializes in the mass production of a wide range of clothing items like
corporate uniforms and school uniforms. The business started trading informally in 2007 and has grown into an established,
reputable business.
▪ The company is located in Teguka Business Park in Philipi, a black township in Cape Town. Rise Uniforms mainly employs
women (staff consists of 81% of women) from the township who are mostly single parents, thus positively contributing to the
improvement of the highly skewed socio-economic dynamics in the Western Cape province.
▪ The business holds an annual renewable contract to supply staff uniforms to Pick n Pay. Rise Uniforms is listed as a national
supplier with Pick n Pay and is part of Pick n Pay’s Enterprise and Supplier Development Programme. Through this
programme, Pick n Pay develops, mentors, and provides support to small scale suppliers while securing its own value chain.
▪ The NEF investment funded machinery, equipment and working capital required for the expansion of the business
Teguka Business Park in Phillipi, Cape Town,
Location
Western Cape
Deal Stage Expansion
NEF Approved
R5m
Amount
NEF Disbursed
R4.1m
Amount
Ownership 100% Black Female-owned
Number of jobs 42 jobs (19 new, 23 maintained)
Product Entrepreneurship
71Contract Mining: Mmutle Mining
Projects
▪ Mmutle Mining (Pty) Ltd was established in 2016 by Mr John M Mmutle. Mmutle Mining (Pty) Ltd provides material
handling, crashing and screening, mining rehabilitation, drilling, blasting and plant hire services
▪ Mmutle was awarded a material handling contract by Zizwe Open cast Mining (Pty) Ltd that will take place at Anglo
Greenside Colliery for 36 months.
▪ The rates and volumes were renegotiated with Zizwe Open Cast mining in favour of Mmutle and that resulted in a change
of Total Contract Value from R35 783 208 to R43 760 854 over 36 months.
Location Middelburg, Mpumalanga
Deal Stage Start-up
NEF Approved
R13m
Amount
Ownership 100% Black and Youth owned
Number of jobs 24 new jobs to be created
Product Contract
72Energy: BP Bridge City
▪ BP Bridgeview (Pty) Ltd t/a BP Bridge City is a 100% black youth owned entity formed for the sole purpose of establishing
a BP service station in Kwa-Mashu Bridge City. The land that the site will be built on is owned by a property development
company owned by the two entrepreneurs, Mr Siyabonga Hlengwa and Mr Wandile Zulu. Both the operating company and
the property company are 100% owned by Mr Zulu and Mr Hlengwa with each holding a 50% shareholding.
▪ The partners did not have the funds to purchase the land but negotiated with BP to make an upfront payment of R10.8
million for the land. The upfront payment equates to ten (10) years rental that BP would have paid to the entrepreneurs
▪ BP will build the service station and install all the necessary equipment. BP Bridge City will comprise of a service station, a
Pick n Pay convenience store, a Hot Dog Café, a Wild Bean Cafe and an ATM.
Location Kwa-Mashu, Kwazulu Natal
Deal Stage Start-up
NEF Approved
R 2,9m
Amount
BP ED Funds R 1,9m
Ownership 100% Black and Youth-owned
Number of jobs 34 new jobs to be created
Product Franchise
73Energy: Shell Ultra City M2
▪ Kwenta Group CC is a 100% black women owned entity. The entity is 80% owned by Ms. Nawaal Motlekar, 45 year old female, with her two siblings
(Ms. T Mdluli and Ms. N Mdluli) both owning 10% each. Ms. Motlekar approached the NEF to acquire the Shell service station on the M2, which is
located between the Denver and Cleveland off ramps in Denver, Johannesburg. The purchase price for the service station was R16,2m. The service
station comprises of a forecourt and three quick service restaurants (QSR) namely, Debonairs, Vida Café, Steers and KFC (KFC not included in
acquisition).
▪ The total funding required was R19.4 million and the entrepreneur contributed R4.4 million of her own funds towards the transaction.
Location Denver, Gauteng
Deal Stage Acquisition
NEF Approved
R 15m
Amount
NEF Disbursed
R 15m
Amount
Ownership 100% Black Woman Owned
Number of jobs 120
Product Franchise
74Agro-Processing: Amantle Trading &
Projects
Project Description
• Amantle Trading and Projects is a start-up dairy processing facility located in rural Groot Marico in the North West province;
• Amantle has secured an off take agreement with Big Save Supermarket for the supply of pasteurised fresh milk, Amasi and
yoghurt over a period of seven years;
• The company is currently leasing a farm from the Department of Rural Development and Land Reform;
• Amantle will source its manufacturing equipment from Delmar Milktech; and
• The company will be sourcing all its raw milk from Tip-Top Milk.
Shareholding Structure Funding Structure
The Shareholding in Amantle Trading The NEF approved a total investment of R8.5 million
and Projects splits as follows: structured as follows:
• Mr. Nkosana Mtimkulu (40%), • Senior Loan of R6.8 million repayable over seven years
• Mr. Sechaba Mtimkulu (30%), and with priced at prime interest rate with 12 months capital
• NEF (30%) to be warehoused and interest moratorium; and
(NEF will provide 20% of shares to the • Shareholders Loan of R1.7 million repayable on availability
trust upon registration and the remaining of cash flow. The loan will target an IRR of 8% upon exit.
10% to the promoters upon exit).
• Create access to and ownership of lucrative agri-business operations for BEE;
• The project will have a positive impact on the previously disadvantaged individuals and the
Investment
community at large;
Rationale
• The project is a Rural and Community development initiative because of its location and
ownership structure, and
• 16 permanent Jobs will be created in remote areas in dire need of job opportunities.
75Retail: Fruit and Vegetables: Goseame
• Goseame was previously majority owned by black
owners including management and staff. Following a
number of defaults from the BEE sponsor, the NEF
took over ownership and management of the
business.
• The business is in retail industry by selling fresh
vegetables, fruits, meat, grocery and fresh flowers.
The business operates on a floor space of around
2200sqm, being a property owned by the NEF. The
business is based in Limpopo, Polokwane industrial
site.
• The NEF provided initial funding of R71 million to
acquire this business from the white sellers. This
was in support of the BEE sponsor who had
identified this opportunity.
• The business is currently under the NEF
management and has maintained 260 jobs.
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