South Africa’s Ramaphosa to Quit His Company, Motlatsi Says
(Updates with analyst comment in seventh paragraph.)
By Mike Cohen and Franz Wild
Jan. 29 (Bloomberg) –- Cyril Ramaphosa, who led negotiations to end apartheid, is quitting the 8.8 billion rand ($803 million) company he founded as he focuses on politics, the man who will replace him as chairman of Shanduka Group said.
The 61-year-old former union leader, who in December 2012 accepted the post of deputy leader of the ruling African National Congress, will also probably need to sell his 29.6 percent stake in the Johannesburg-based company, James Motlatsi, who will become chairman of the group, said. Shanduka holds stakes in mines owned by Lonmin Plc, mines coal in a venture with Glencore Xstrata Plc (GLEN) and controls the McDonald’s Corp. (MCD) franchise in South Africa.
“Cyril has left already and he will no longer play a leading role within this company,” Motlatsi said in a Jan. 27 interview at Shanduka’s Johannesburg headquarters. “I believe Cyril will ultimately have to divest. If his share is bought, that should be by a black consortium, because we want to remain a black-controlled company.”
Ramaphosa resuscitated his political career when he secured the No. 2 post in the ANC, and is frontrunner to become the nation’s deputy president after elections that are due to take place by July. Last year he resigned from the boards of companies including MTN Group, Lonmin and Standard Bank Group after initiating a review of his business interests to address possible conflicts of interest.
He quit politics for business in 1996 after earlier losing the contest to become South Africa’s first post-apartheid deputy president under Nelson Mandela to Thabo Mbeki, who became president in 1999. Ramaphosa led the ANC delegation that negotiated an end to apartheid with the then ruling National Party before the 1994 all-race elections.
Ramaphosa yesterday was named in the second position on the ANC’s list of parliamentary candidates. Aside from Mandela, South Africa’s three post-apartheid presidents have initially served as deputy national leader.
“Cyril is deciding to step back into politics with both feet and government,” said Sinethemba Zonke, a political analyst at africapractice. “We may see him taking a lot more control over policies in the country.”
Ramaphosa founded Shanduka in 2001, building it into an enterprise with stakes in 29 businesses in five countries currently worth 8.8 billion rand on a net asset value basis, according to Phuti Mahanyele, Shanduka’s chief executive officer. That would value the stake owned by Ramaphosa’s Tshivhase Trust at about 2.6 billion rand.
Motlatsi, who unlike Ramaphosa will serve in a non-executive role, helped him found the National Union of Mineworkers in 1982. The union, which led the country’s biggest ever mine strike in 1987, was South Africa’s largest labor group until last year. Motlatsi has served on the board of Shanduka since it was founded.
Mahanyele said in a separate interview on the same day that an announcement about Ramaphosa’s plans will be made at a later stage. She didn’t comment further.
“Mr. Ramaphosa initiated a review of his business interests following his election as ANC deputy president and has stepped down from a number of positions,” Steyn Speed, a spokesman for Shanduka, said by e-mail. “This process, which involves consultation with affected companies and other stakeholders is ongoing and he will make further announcements when appropriate.”
In 2011, China Investment Corp., the nation’s sovereign wealth fund, agreed to buy 25 percent of Shanduka for 2 billion rand.
While Shanduka initially targeted so-called black economic empowerment deals, which companies entered into to meet their obligations to the state to give a greater stake in the economy to the nation’s black majority, that’s no longer the case, Mahanyele said.
Shanduka is seeking new acquisitions and disposing of some of its current investments.
“Resources is a sector where we have acquired a number of assets in past years,” Mahanyele said. “We are not necessarily looking at new investments in resources per se. The consumer goods sectors are the ones we’re really keen on looking at.”
Shanduka may also consider an initial public offering in some of its units within the next three years.
“The focus of the management team right now is to make sure we have got good sizable assets that we could list in the next few years,” Mahanyele said. “It’s something that remains an objective but we will do it at the right time. We are not under pressure.”