The business environment isn’t pretty: South African economic growth is flat or negative, the political climate is turbulent, the fat cats of state capture still live the high-life, and a ratings agency downgrade looms.
It may seem all doom and gloom, but there is an upside. A real, significant upside that favours the stayers, the optimists, the pragmatists and those who desire success…
Ready for it?
It’s the best time ever to do a BEE ownership deal.
Because the valuation of your business is down. Which means that a BEE ownership transaction is easier to finance. Ergo, a deal is easier to do, and you can be quickly on your way to getting the 51% ownership ‘hunting license’ that’s a clear competitive advantage.
Now, there are many ways to do ownership deals and in most of them if you sell shares at a lower value now then the BEE partners will get a lot more upside (arguably at your expense). But there are ways to structure deals where the low valuations now can work very much in your favour.
The Tusker approach to doing BEE ownership does just this. The details are obviously confidential (it’s our, and ultimately your competitive advantage) but let’s just say that we actually feel sorry for those that did BEE deals when the economy looked great and before we realised the mess of state capture and corruption…
Those earlier deals often used broad-based schemes (regularly attacked by the BEE commission), modified flow through (which offered something-for-nothing back then but is now a significant disadvantage), and in most of them the BEE partners have debt in the deal – debt that is under-water compared to the current value of the business and thus really hits hard on the net value calculations of the economic interest score.
i.e. doing a BEE ownership deal now can let you leapfrog the early movers. It can set you up for years of growth, letting you take market share from non-BEE competitors, or even from those who have done deals previously that have all the prior disadvantages.
For those committed to building their business in South Africa we have a special BEE deal for you: a deal that achieves legitimate empowerment and builds a better ecosystem around your business. A deal that our clients chose over other approaches every single time.
Ready to grow? There has been no better time.