Old Mutual Alternative Investments (OMAI), through its Hybrid Equity capability, a specialist in innovative financial solutions, has announced a R125m preference share facility to Afropulse Group, a wholly black women-owned investment holding company. 

The facility will be used to restructure Afropulse Group’s funding, which is backed by an equity interest in Imperial Logistics South Africa, one of the country’s largest logistics firms.

Abdu-Rahman Abrahams, Co-Head of Hybrid Equity, said: “This strategic move aligns with the goal of fostering broad-based black economic empowerment and diversity in a sector crucial to the nation's economic growth.”

As part of this initiative, a preference share facility was extended to Afropulse Group, supported by their 6.56% shareholding in Imperial Logistics.

Phumzile Langeni and Bongi Masinga, Co-founders of Afropulse Group, said innovative funding mechanisms were vital to empower black women, an underrepresented group, in economic empowerment transactions.

“We have plenty of good policies and initiatives to promote economic empowerment, but historically disadvantaged groups may continue to be left behind without the requisite capital to fund their access,” they said. 

“Afropulse Group’s partnership with OMAI is a landmark in our country’s journey towards economic inclusivity. This investment not only supports our stake in a vital industry but also propels the agenda of black women’s ownership in the South African economy,” they added.

South Africa’s freight and logistics market is expected to grow significantly from 2024 to 2029 due to a substantial increase in online retail, according to a research study by Mordor Intelligence. 

According to Mordor, the South African freight and logistics market is estimated to reach $22.92bn in 2024 and is expected to reach $30.56bn by 2029, growing at a Compound Annual Growth Rate (CAGR) of 5.92% during the forecast period.

This restructuring will optimise Afropulse Group’s capital structure, further solidifying its position in the logistics sector.

Abrahams said that despite challenging economic conditions, this investment demonstrated continued confidence in South Africa's strategic logistics sector.

“As this critical sector continues to grow and develop, it is essential that it embraces and facilitates transformation and empowerment to help fight economic inequality and promote inclusivity,” he said. 

In 2021, Hybrid Equity concluded a B-BBEE deal to assist in funding the Afropulse Group’s acquisition of a 6.56% shareholding in Imperial Logistics. 

As part of the overall transaction, Hybrid Equity provided preference share funding of approximately R112m as part of a junior quasi-equity-related funding package.