BEE deal on the cards for KWV Limited
Tuesday, 10 February, 2004
Arnold Kirkby
KWV is on the brink of fulfilling a most important initiative
By Arnold Kirkby
Imagine the reaction 10 years ago, to the KWV board entertaining a serious offer to provide 25,1% of the then co-operative's shares to a black economic empowerment consortium!
The fact that recently elected KWV Limited chairman, Danie de Wet, made the announcement at the annual harvest celebration function at the weekend, was indicative of how far South Africa and the industry had progressed.
'At the beginning of 2004, KWV is on the brink of fulfilling a most important initiative that will bring about a historical change in the ownership of the organisation,' he told the gathering in the Cathedral Cellar. A black empowerment initiative would see a quarter of the company's shares go to a selected consortium which was aligned to the South African Wine Industry Trust. He paid homage to the work done by his predecessor, Lourens Jonker, who was honoured on the night, as well as SAWIT chairman, Gavin Pieterse.
De Wet said Jonker drove the changes that had transformed the face of the industry in the past 10 years. Pieterse, chairman of SAWIT for the past two years, had to a large extent, been the driving force behind the successful initiation and negotiation of the Black Empowerment Enterprise (BEE) arrangement with KWV Limited. 'In this way, KWV is committing itself anew to its South African roots and its belief in a shared and prosperous future for a shareholder community that includes the historically disadvantaged.
'This is the first big equity empowerment agreement in the wine and spirits sector of the economy,' he added. De Wet said the industry and government were the company's two major partners and over the past year the board had supported BEE initiatives and looked at initiatives to support the government's goals. KWV's BEE goals included the promotion of economic change, as well as transforming the composition of ownership in the industry, facilitating access to expertise, infrastructure, economic activity and capital.
The company had emphasised from the outset that BEE transaction would have to have the approval of the ministers of agriculture and land affairs as well as trade and industry. SAWIT in particular under Gavin Pieterse had made the transaction possible on a practical level for KWV and had also borne the initial costs for the appointment of merchant bankers. The non-profit organisation played an important role in the composition of the consortium, including the all-important aspect of financing the empowerment transaction.
KWV wanted a broad-based empowerment that emphasised synergy between the historically disadvantaged and KWV's financial goals. Two directors would be appointed from the consortium to serve on the KWV board. 'We believe this will eventually pave the way for a variety of new black partnerships and transactions in the South African wine industry,' said de Wet.