An empowerment consortium, led by Batsalani Communications, has clinched a 60% empowerment shareholding - worth $64 million - in Gateway Communications.
Other empowerment investors include the LA Group, Willowton Oil and Earlyworks, with additional funding coming from the Industrial Development Corporation (IDC) and Investec.
"The liberalisation of the telecoms industry offers immense opportunities for the IDC to facilitate the participation of black investors in telecoms," says IDC head of corporate affairs, Dante Mashile.
Farouk Abrahams, CEO of Batsalani, agrees. "One of the great things about this deal is that Gateway, as a value-added network services (VANS) provider, has already more than met its BEE obligations in terms of the VANS licensing conditions.
"Batsalani has worked with Gateway for several years, and with one of our key areas of focus being ICT and Gateway seeking a BEE partner going forward, there was plenty of symmetry in terms of this deal."
He says Batsalani will bring a number of key relationships to the table to help Gateway to further grow its business.
"With Gateway being a South African company, but also having a presence in many African nations, this deal can only be good for both parties, as they are both respected across the continent and this will only enhance our reputations across Africa," says Abrahams.
Apart from the contribution from Gateway Communications International, all investment and funding for this deal was sourced from within SA.
"This was a deliberate decision on our part, as we wanted to give local investors, particularly those from historically disadvantaged backgrounds, the opportunity to become part of this exciting journey," says Mike van den Bergh, a director of Gateway.
"We are also extremely excited by the value that we believe our new partners will bring to Gateway and it will ensure that from the outset we will exceed all BEE equity targets laid out in the ICT charter, which is something we truly believe in."
Van den Bergh says that as a multinational company, Gateway`s decision to become black-owned will not only affect its South African operations, but will occur at all levels of the international operations too.
"When we made the decision to invest in Gateway, we did so because we were excited by the prospect of being part of the first truly pan-African telecommunications carrier, as this will provide the economic reality to what Nepad is all about," says Abrahams.
"The African Renaissance is all about getting Africans communicating as a basis for rapidly advancing and integrating the socio-economic standing of the continent, and Gateway is the vehicle which will be instrumental in making that happen."
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