Johannesburg, 04 Feb 2003
Empowerment in the financial services sector took a step forward today at the launch of the partnership between the Black Economic Empowerment consortium headed by Millennium Consolidated Investments (MCI) and Alexander Forbes.
Introducing the first phase of the deal to clients at a function in Johannesburg, Alexander Forbes CE Rael Gordon said the fundamental tenet behind empowering organisations, communities, and individuals is fostering a growing South African economy.
Gordon said, "We had to think beyond the short-term expediency of creating pockets of empowerment geared to secure tenders. We also needed to engage partners who understood economic empowerment. The aim is to focus on long-term sustainability and transformation."
Alexander Forbes is not new to empowerment initiatives. Empowerment groups have previously benefited from a shareholding of more than 15% in the limited holding company. Alexander Forbes has also created joint ventures and empowerment business initiatives in both the risk and employee benefit areas.
"This transaction gives us a sustainable platform to ensure transformation into the future, as well as satisfy the need for broader-based empowerment," said Gordon.
"Transformation will be encouraged through the appointment of Cyril Ramaphosa to the Board of Alexander Forbes Limited and he and other representatives from the MCI consortium will serve on the board of Alexander Forbes South Africa."
The Alexander Forbes Community Trust will own 5% of the 30% allocated to the consortium. It is hoped that this shareholding will be built to an asset valued in excess of R100 million over the next few years, said Gordon. The Trust will have specific mandates to support those suffering from HIV/Aids, assist the aged and the disabled and improve access to education. Trustees will work with existing national structures where possible and Alexander Forbes will provide cash flow of between R3 million and R5 million per annum to the Trust to help it sustain its commitments.
The MCI-lead consortium is to acquire 30% in total of the Alexander Forbes South African businesses, including Investment Solutions, which has been de-listed from the JSE Securities Exchange and brought back into the Alexander Forbes stable. The transaction, valued at close to R1 billion, will be vendor financed by Alexander Forbes and is dependent on the Group attaining specific growth targets in line with its historical performance.
He said empowerment continues to evolve and for Alexander Forbes, the launch of this first phase is not the end of any process, but rather an ongoing step in meeting the expectations of their clients, shareholders and employees.
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