Management buyout of Mara Phones in the works
Mara Phones South Africa MD Sylvester Taku is leading a management effort to turnaround the defunct smartphone manufacturing facility through a management buyout.
Taku, who previously served as head of growth at Mara Phones, was appointed as MD of the South African operations in January last year.
In a statement, Taku says the management buyout team is working to “restructure and turnaround the company and have been co-operating with those most affected, including creditors and staff”.
He says: “The management buyout team’s turnaround proposal is currently under consideration with the lenders, and we strongly believe that our proposition will herald a new era for our local smart devices manufacturer.
“Our intention is to re-start operations in Durban as soon as possible, with our valued and loyal staff, and build a proudly South African smart devices company together, with local ownership and leadership at the helm, and a dedicated and skilled local workforce. We are confident that 2022 will be one of renewal, growth and success.”
Last week, reports emerged the Mara Phones smartphone manufacturing plant, which was once billed as the hub of "true" African smartphones, was “empty and on auction”, with the sale mandated by Standard Bank and the Industrial Development Corporation (IDC) – financiers of the smartphone facility.
Standard Bank and the IDC provided around R100 million and R238 million, respectively, to fund the Mara Phones factory.
Mara Phones South Africa, which is part of the global Mara Corporation and domiciled in Dubai, United Arab Emirates, launched its operations in South Africa in 2019, after which it established the state-of-the-art manufacturing plant. It is located at the Dube Trade Port Special Economic Zone in KwaZulu-Natal.
At the time, Mara Group founder and CEO Ashish Thakkar highlighted that while a few smartphones are assembled in Africa, nothing is truly being manufactured on the continent.
According to the statement, in July 2021, after the shareholder of Mara Phones South Africa had failed to capitalise the business and pay its debts as they became due, the then-newly appointed MD (Taku) formulated a team to seek a solution to ensure business turnaround and continuity through a management buyout.
“As the management buyout team of Mara Phones South Africa, we would like to clarify that we were not in control of the company during the period that it incurred significant indebtedness to IDC and Standard Bank, and liabilities to other creditors; nor at the time that the company failed to meet its financial obligations as they became due.
“Whilst we would not wish to comment on the actions or omissions of those in control of the company at those material times, nor to downplay the gravity of the situation in which those affected find themselves, there is no doubt that the company’s challenges were made worse by the COVID-19 lockdown, which was particularly severe for start-up companies.
“We are particularly conscious that, whilst all creditors are important, employees and small businesses have suffered immense personal hardship over many months; to all of whom we have extended our sympathies and have promised to use our best endeavours to make the best possible restitutions in the prevailing circumstances.”
In the opinion of the management buyout team, the South African government, telcos, creditors, banks, and the independently-owned and operated Mara Experience Store franchise, as well as the wider industry in general, have extended the venture a great deal of patience and support, for which it is appreciative, concludes the statement.