Arch Equity has acquired 30% of Orion Telecom in a groundbreaking R54 million BEE deal for the telecoms sector. The deal sees Orion Telecom become the first service provider to comply fully with the seven codes of good BEE practice as set out in the ICT charter.
Arch Equity has put forward 60% of the cash, and CEO Desmond Lockey says the company is fully committed to participating actively in Orion Telecom`s future.
"Since deregulation in the sector, we see ICT as a field offering incredible opportunities for growth. We do not intend to be a passive investor, and hope to win new accounts on the back of Orion Telecom`s full BEE credentials."
A R580 million investment company, Arch Equity comprises 10 000 black shareholders (53.2%) and focuses on investments in the service industry.
"All our companies are service-related, and Orion Telecom is no different," says Lockey. "We try to find companies that are not just successful, but that have good prospects for growth. The capital outlay required for the service industry is relatively low, and for black empowerment purposes we can create more opportunities and find more shareholders if we invest in companies that have a lot of room to grow."
According to Lockey, the deal will enable Orion Telecom to further entrench its position with existing clients, as well as opening new corporate and public sector opportunities in the wake of deregulation.
"Having access to all clients on the back of true BEE status will benefit not only Orion Telecom, but Arch Equity and its shareholders as well. The telecoms sector is experiencing a growth phase, and we hope to explore new opportunities with Orion Telecom."
Jacques du Toit, Orion Telecom director, urges telecoms consumers to check the BEE credentials of potential service providers before making any choices.
"It`s crucial that customers buy from the right supplier that is committed to proper broad-based black empowerment. Any good service provider should be able to prove its credentials, and we are very proud to be able to prove that we comply fully with the BEE code stipulated in the ICT charter."
Du Toit says the deal with Arch Equity is the first and most important step to full BEE compliance.
"Two codes, regarding management and shareholding, are still pending approval by the cabinet, but we expect few changes. We are confident that Orion Telecom is the country`s only broad-based BEE service provider, and we are committed to meeting and exceeding all empowerment requirements when they are finalised. Orion Telecom has pioneered least-cost routing technology for a decade, and now we are also leading the way to broad-based black empowerment in the ICT sector."
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