Johannesburg, 08 Apr 2008
Private office automation player Itec has officially announced a multimillion-rand broad-based black economic empowerment (BEE) deal with Cape Town-based non-profit organisation (NPO) Ikamva Labantu.
Speaking during an interview on the eve of announcing the deal to the broader public, Itec CEO Jacques Duyver said Ikamva Labantu was chosen as a BEE partner because Itec wanted to broaden the scope of its BEE activities.
"I wanted to do something socially correct with our shares," says Duyver. "Post-1994, NGOs have had to become more business-oriented and we liked Ikamva Labantu`s board and their disciplines, as well as the people they associate with."
Ikamva Labantu is one of the country`s largest NPOs and has been in existence for 30 years. Some of the major companies that contribute to it on a regular basis include Pick 'n Pay and Volkswagen.
Under the BEE deal, Ikamva Labantu takes a 50.1% stake in Itec, with the equity transaction being paid off through dividends. The deal is effective as of 1 March and, under the new structure, the NPO will have three executives on the six-man Itec board.
Duyver explains that Itec had two choices when it came to selecting a BEE partner.
"The first was to take on black guys to run the business at holdings level, which is very hard to come by," he says. The second was to partner with a broad-based community-based organisation, such as Ikamva Labantu.
"We did not want a partnership that would enrich one or two individuals; we wanted a broad-based agreement that would impact the lives of thousands of underprivileged people," notes Duyver.
He says Ikamva Labantu will also serve as Itec`s corporate social investment partner.
Itec recently parted ways with Tiyende, a consortium headed by the prominent Sisulu family, with which it had created Itec Tiyende. The telecommunications-oriented business unit continues to exist within the Itec stable, even though the Sisulus have withdrawn from the business relationship.
Ikamva Labantu Empowerment Trust MD Sipho Puwani says the NPO is focused on getting vulnerable members of the community to become self-reliant.
"It is vital for the organisation to move beyond the provision of welfare and to focus on empowering people so they can work and create income for themselves," says Puwani.
In this context, he has welcomed the Itec deal, saying it allows the NPO to plan five years ahead of time and be less dependent on donor funding, "which typically covers 12 months at a time".
Related stories:
Itec, Tiyende part ways
Itec replaces Sisulus
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