South Africa’s Group Five still looking for an equity partner

PUBLISHED: Mon, 29 May 2017 16:33:53 GMT

South African construction firm Group Five said on Monday it had received expressions of interest from a number of potential equity partners as part of a settlement agreement with the government but had no firm offers.

Group Five was one of seven construction companies which agreed in October to contribute a total of 1.5 billion rand ($116 million) over the next 12 years towards a fund to develop workers’ skills and give black South African workers a bigger role.

This followed antitrust authorities imposing a penalty on the sector in 2013 for collusion in tendering processes.

As part of the deal with the government, the construction companies have an option of either mentoring up to three emerging black-owned enterprises or selling not less than a 40 percent economic interest to a firm that is more than 51 percent black-owned, managed and controlled.

“These will be reviewed by the board, the Mergers and Acquisitions sub-committee and independent advisors, who will then determine the next steps based on the best interests of the company and shareholders,” the company said in a statement.

The firm, which also has interests in manufacturing and investments and concessions, also said that it was not currently in possession of “a bona fide offer, of a binding or non-binding nature, for any assets of the group.”

However, the group said it was on track with its overhaul of the the Engineering and Construction division, with the divisional business units cut from 11 to four, which has resulted in the loss of 149 jobs.

($1 = 12.9473 rand)

(Reporting by Nqobile Dludla; Editing by James Macharia, Greg Mahlich)

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