South African Billionaire Samson Discovered Selling Steel Empire

South African steel tycoon Eric Samson was ready to finish the job.

At a tense board meeting of the Nelson Mandela Children’s Fund in 2014, members grappled with how to complete construction on its flagship hospital in Johannesburg. The building was backed by Samson, a friend of the country’s late president, and was behind schedule and short of cash.

“We thought we should be on the ground already,” Sibongile Mkhabela, the fund’s CEO, said by phone. “As we were looking at the numbers, Samson simply said ‘I will put in 100 million rand.’ And that was that.”

The $8.4 million donation comes as Samson, 76, unwinds an industrial empire that he spent more than five decades building across three continents. His fortune, most of which is derived from steel and real estate assets he quietly amassed through his Macsteel holding company, is valued at $1.1 billion, according to the Bloomberg Billionaires Index. He’s never appeared on an international wealth ranking, and didn’t respond to phone and e-mail requests seeking comment.

For Samson, selling shares to the public was never an option.

“We’ve ploughed back our profits and funded our own expansion,” he was quoted as saying in a 2006 article in the Financial Mail newspaper, one of only two interviews he’s ever granted. “We’ve never needed the glorification. We have simply got on with our business.”

Selling Assets

Last year, he sold 28 South African commercial properties that are home to the businesses and service hubs of Macsteel Service Centres SA. The real estate, owned by Macsteel Coreprop, Macsteel Genprop and Macsteel Service Centres SA, was bought for $272 million by Johannesburg-based developer Redefine Properties Ltd.

Three years earlier, he sold Macsteel Services Centers U.S.A. to Duisburg, Germany-based Klockner & Co. for $660 million, according to press releases at the time.

Samson has spent his whole life in the steel business. He joined his father’s fencing and wiring business, Pan Africa Staalhandel, after finishing high school in 1958, according to a 2008 post by Macsteel on a trade group’s website. He became a managing director of the business in 1965 after it merged with competitor S Machanick & Co.

He founded Machanick Steel & Fencing after buying land in Wadeville, an industrial area of Johannesburg that would become Macsteel’s future headquarters. By 1974, he’d bought out his partners and become the company’s sole owner.

Soweto Riots

After the 1976 riots in Johannesburg’s Soweto district, Samson expanded outside of his home country, according to a 2013 article in the South African Jewish Report, and opened Macsteel’s first trading offices in Houston and London.

In 1996, he formed Macsteel International, an Amsterdam-based steel trading company, through a joint venture with billionaire Lakshmi Mittal’s ArcelorMittal SA. He bought 49 percent of Iskoor, then a joint venture between Iscor, a state-owned South African steel producer, and Ramla, Israel-based Koor Industries two years later. He gained full control of the combined company shortly after.

In 2006, Samson sold about a quarter of his flagship business, Macsteel Service Centres SA, to a consortium of black shareholders to keep in line with the country’s economic empowerment principles aimed at transferring wealth to the nation’s black population. The buyers included a company controlled by South African deputy president Cyril Ramaphosa.

Franschhoek Vineyards

Samson is shopping the rest of his flagship business. The company announced in January that Southern Palace Group, a Sandton, Johannesburg-based business with investments in steel, motoring, technology and property, is the preferred bidder.

He plans to keep Macsteel International and Iskoor, which processes 300,000 tons a year and has annual revenue of more than $300 million, according to its website. He told the Jewish Report he would never sell Israel-based Iskoor.

Samson divides his time between Cape Town and Israel, he told the Jewish Report, and has been investing in property at home. He bought a 198 million rand penthouse for his daughter in Clifton, Cape Town, according to the Johannesburg weekly newspaper City Press. He sold three other units in the same apartment block, public records show.

He also owns a vineyard in Franschhoek, the wine country outside of Cape Town, as well as several properties elsewhere in South Africa, according to deeds records.

The billionaire has maintained his commitment to the Mandela fund, serving on its board for two decades and donating 1 million rand every July to correspond with the former leader’s birthday.

“He often just drove his car around and handed in a check,” said Mkhabela. “Sometimes he just left it at the finance department without even letting me know he was here.”

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