SOUTH AFRICA – Italtile Commercial Division, a tile manufacturer has sold 2% of its stake for R312.2m (US$21.21) to Yard Investments Holdings in a black economic empowerment (BEE) transaction, reported Business Day.
The Shanghai, China-based NDB, which is also known as the Brics Development Bank, is a multilateral development bank established by the Brics states. It supports projects through loans, guarantees, equity participation and other financial instruments.
Italtile executive director for retail Brandon Wood said the empowerment deal with Yard, entered into on August 22, was in line with Italtile’s strategy of improving its BEE credentials.
Italtile said the transaction was expected to enhance Italtile’s BEE ownership credentials for at least three years.
Wood said, “In terms of the BEE codes, a three-year partnership is the minimum period permitted, which would enable the business to secure or enjoy continuous benefits according to the ownership criteria credentials prescribed.”
He said the company’s ambitions also included establishing a medium to long-term relationship with a BEE partner with international commercial experience relevant to the company’s business.
“This includes significant experience in the China — a market which the Group currently sources product from,” he said.
Wood said there was limited appetite for equity higher than 2%. “This transaction has taken 18 months to conclude, following extensive investigation of potential interest in the market and of prospective partners. At present in the market in SA there is limited appetite for capital investment at higher levels,” he said.
The acquisition would be funded through a combination of equity and debt. “We are not at liberty to disclose further detail,” Wood said.