Cyril Ramaphosa, one of South Africa’s richest black businessmen whom many consider a shoo-in for deputy president after the May 2014 elections, is selling his share in Shanduka, a conglomerate worth $1 billion, BusinessDayLive reports.
Ramaphosa was instrumental in the anti-apartheid struggle, leading a 1987 strike and then heading ANC negotiations before the country’s first democratic elections in 1994. He built his business empire after leaving the political stage in the mid-1990s.
Bankers and business partners expect Ramaphosa to go ahead with a sale and say it will affect high-profile assets from Mozambique to Nigeria, according to BusinessDayLive.
Shanduka’s portfolio includes the South African McDonald’s franchise, a coal-mining venture with Glencore Xstrata, a stake in Standard Bank, and Coca-Cola bottling operations. The decision will also affect his co-investors including the China Investment Corp. sovereign wealth fund.
Forbes magazine put Ramaphosa’s net worth at $700 million in November. Patrice Motsepe, his brother-in-law, is considered South Africa’s only black billionaire with a reported net worth of $2.7 billion.
South African bankers say Ramaphosa is too high-profile and Shanduka’s
investments too important for him to simply lock away his business interests in a blind
trust — as Tokyo Sexwale did when he became a cabinet minister in 2009.
Ramaphosa — who re-entered politics when he was elected ANC deputy president in December 2012 — controls 30-percent of Shanduka.
Shanduka CEO Phuti Mahanyele says the conglomerate has been working on contingency plans as Ramaphosa reenters politics. “We will make sure that we do all the right things,” she said, “especially for the rest of our shareholders.”
Ramaphosa, who has other business interests, is among the richest and most prominent of a generation of black tycoons who built business empires in the post-apartheid era.
His political trajectory may lead him to the country’s top job. Some commentators suggest President Jacob Zuma, who has been dogged by scandal, may not serve a full second term.
Rothschild SA CEO Martin Kingston says Ramaphosa must sell his share in Shanduka to avoid the appearance of conflict of interest if Shanduka or its partners are involved in deals after Ramaphosa has joined the government.
“For the last 13 years he has built a successful, diversified empowerment group,
significantly — but not exclusively — based on his own relationships and profile,” Kingston said.
Shanduka has significant other shareholders to consider. When China Investment Corporation made its first investment in sub-Saharan Africa it spent $243 million for a 25.7-percent stake in Shanduka in 2011. Standard Bank, Africa’s largest lender by assets, holds nearly 13 percent.
The challenge for Ramaphosa and Shanduka, if he does divest, is that they not only have to
find a buyer with the financial muscle to buy him out. It also needs to be someone with
similar stature and network Ramaphosa’s.
Shanduka may be privately owned but it must still answer “to a lot of partners, especially the Chinese,” a South African executive who knows the company said. “There is a kind of need for a rainmaker…. It’s not just buying his share, but bringing that rain-making ability.”
In many of Shanduka’s deals it has been the black economic empowerment partner for other companies. With Ramaphosa at the helm, Shanduka was the go-to empowerment candidate because of his high standing in both the political and business worlds, and the ease with which he straddles the two, BusinessDayLive reports.
Shanduka says Ramaphosa reviewed his business interests since being elected ANC deputy president. He resigned from the boards of platinum miner Lonmin and telecoms group MTN.
