Belelani Capital, a Broad Based Black Economic Empowerment (BEE) company, has acquired a 24% shareholding in Pareto (Pareto Limited and Business Venture Investments No. 1360) from the Government Employees Pension Fund (GEPF).

Belelani Capital secured funding from Absa Corporate and Investment Banking and Rand Merchant Bank.

The shareholders of Belelani Capital comprise the management and employees of Pareto, the GEPF (on behalf of a broad based trust to be established) and Belelani Group led by Malose Kekana.

Kekana has over 20 years of banking experience and is currently chairman of Ithala SOC Limited (a retail bank in KZN) and founding CEO of Umsobomvu Youth Fund.

Kekana said: “We are delighted to become shareholders in one of South Africa’s leading retail property groups. The transaction has resulted not only in greater transformation in the sector, but has led to meaningful management and employee ownership of the Company. We look forward to working closely with all stakeholders, as we begin this partnership to further develop Pareto into the preeminent retail property business.”

Pareto was previously wholly owned by the GEPF under the management of its asset manager, the Public Investment Corporation (PIC).

Daniel Matjila, PIC CEO, said: “The transaction will assist in deleveraging the balance sheet, and allows for the introduction of a black owned and controlled company with a meaningful shareholding in Pareto. The transaction fulfills the growth and economic transformation objectives of the GEPF’s mandate with the PIC.”

“Not only is this an empowerment transaction, but the lead promoter will be actively involved in providing commercial and strategic support to Pareto to position the Company for growth. We are pleased that we have created an opportunity for management and employees of Pareto as well as other broad based beneficiaries to directly participate in this empowerment transaction with third party funding raised by the lead promoter supported by a credit enhancement by the PIC,” he said.

Pareto was founded in 1998 and now owns stakes in a number of South Africa’s premier shopping centers valued at more than R25bn.

The properties include the Cresta Shopping Centre and Sandton City Shopping Centre in Johannesburg, the Pavilion Shopping Centre in Durban and the Tyger Valley Shopping Centre in Cape Town.

Saul Gumede, Pareto Chairman, said: “We are pleased to have concluded a transaction that strengthens the Company for growth and enables transformation of the industry by introducing BEE ownership in one of the large retail property companies.”

“The subscription proceeds will allow Pareto to settle existing debt facilities and fund future developments and the refurbishments of existing malls within the portfolio. We are pleased to partner with Malose Kekana of Belelani, who brings a wealth of experience in deal making, corporate finance and investment market expertise to Pareto,” he said.