Royal Bafokeng Holdings (RBH), a South African community-based investment company, has agreed to acquire infrastructure and energy assets from Aveng Capital Partners, for a cash consideration of R860m ($63.8m). 

These sales are subject to the normal and customary terms and conditions, including the fulfilment of certain conditions precedent. 

The effective date is estimated to be on or about October 31, 2016. 

These investments include: the 138MW Gouda wind farm, one of the largest wind farms in the Western Cape, on which 46 wind turbines are erected; Imvelo Concession Company, which is the holder of a 27-year concession to build, operate and maintain the Department of Environmental Affairs’ office campus in Tshwane; N3 Toll Concessions, which entered into a 30-year concession agreement to design, construct, finance, operate and maintain the N3 toll road between the Cedara Interchange in KwaZulu-Natal to the Heidelberg South interchange in Gauteng; and the 74MW Sishen Solar Photovoltaic Plant located in the municipality of Dibeng in the Northern Cape.

Aveng Capital Partners is the investment and structured financing arm of Aveng.

The company focuses on originating, developing, structuring and investing in general infrastructure, power and real estate projects in South Africa and selective economies in Sub-Saharan Africa.

Kobus Verster, Aveng CEO, said: “These investments have reached an appropriate maturity where we can transfer them to a strong investment company and realise value for the Group. Aveng Capital Partners will continue to pursue project development opportunities for the Group as our investment and structured financing arm.” 

Royal Bafokeng Holdings (RBH) has been mandated by its shareholder, the Royal Bafokeng Nation Development Trust (RBNDT), to manage the Royal Bafokeng Nation’s (RBN’s) commercial assets to ensure long-term sustainable returns for the benefit of current and future generations of the Bafokeng people.

RBH’s growth uplifts and creates intergenerational wealth for the Royal Bafokeng Nation (RBN), a 100,000 strong Setswana-speaking community in South Africa’s North West province. 

RBH is a long-term investor that acquires significant stakes in high-quality companies. 

The funding of the overall portfolio is made through a combination of equity capital provided by the RBN and by prudent levels of debt.

In the medium term, RBH is targeting investments in Sub-Saharan Africa and, in the long-term, will add developed-market exposure, absolute-return strategies, as well as inflation-linked fixed income.

Albertinah Kekana, RBH CEO, said the proposed agreement and its focus on renewable energy, property and road infrastructure is in line with the company’s diversification strategy.  

“As a long term investor, we are pleased to be partnering with Aveng Capital Partners, the investment and structured financing arm of Aveng, which has a very credible track record in originating, developing, structuring and investing in general infrastructure, power and real estate projects in South Africa. This proposed deal represents our long term investment approach and our commitment to the South African growth story,” he said.

In addition, Aveng has reached an agreement with Kutana Investment Group to acquire its steel reinforcing and mesh business (Steeledale) in terms of a phased exit strategy. 

From the effective transaction date, which is estimated to be on or about November 1 2016, Kutana will acquire 70% of the Steeledale business. 

Aveng said it can elect to sell the remaining 30% at any time after three years.  

The sale price is determined by way of a formula applicable at the effective date and the purchase consideration is expected to be approximately R252m, of which between R93m and R123m will be paid in cash and the remainder paid on a deferred basis.  

“The sale of 70% of Aveng Steeledale is in line with our medium term strategy to divest from steel and improve the Group’s returns. Kutana, as a black women-owned investment group, will improve market access and position the Steeledale business for growth in a difficult and competitive market environment,” Verster said.

Thoko Mokgosi-Mwantembe, CEO of Kutana, added: “The Steeledale acquisition forms a cornerstone of our steel and construction business strategy. With our experience and focus, we are uniquely positioned to drive the growth of the business in South Africa and we look forward to creating significant value for all our stakeholders. Empowerment of the people of South Africa, in particular the communities in which we operate, is at the heart of the Kutana philosophy.” 

“The Steeledale acquisition is further testament to this and we will seek to create significant opportunities for our employees, partners and communities through this acquisition,” she said. 

“I am pleased that both these transactions have been implemented in line with our strategy and previous announcements. In addition to realising value, we have also established partnerships with two exceptional empowered companies and I look forward to forging positive relationships,” added Verster.

Aveng is still in negotiations relating to the sale of its Aveng Trident Steel and Aveng Steel Fabrication business units, and the introduction of a B-BBEE partner to Aveng Grinaker-LTA.