Networking group Cisco's local operations will be restructured, resulting in the company becoming black empowered.
News reports this morning indicated the US-based company is restructuring its local operations, which will result in the creation of two black-empowered companies. Each will be 25% black-owned.
South African legislation requires black equity ownership of 25.1%, but allows for equity equivalents to be applied for in the case of multinational firms.
Cisco VP for Africa and the Middle East Mark de Simone is quoted as saying the company will open two new divisions: Cisco Capital and Cisco Advanced Services. Shares will be sold at market-related prices and the initial 25% stake may be increased later.
The company is not expected to sell shares of its existing operation to local investors. However, by restructuring, it will be able to sell equity in the two new divisions to black partners.
Black managers will run the new divisions and an advisory board is being established to aid Cisco's understanding of local empowerment requirements. The move will also see internal reshuffling, said the report.
Cisco SA was unable to comment this morning, referring all requests for information to the UK division. The UK office had not responded to requests for comment by the time of publication.
The company is expected to report its second quarter results tomorrow, after the US market closes.
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