Absa Capital buys 8% stake in Gautrain

Posted On Tuesday, 08 July 2008 02:00 Published by eProp Commercial Property News
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ABSA Capital’s Infrastructure Equity Investments has acquired a direct 8% shareholding in the Gautrain.

Infrastructure IndustryABSA Capital’s Infrastructure Equity Investments (IEI) said yesterday it had acquired a direct 8% shareholding in the Gautrain, and would fund a further 8% acquired by black economic empowerment company J&J Group for a combined value of R112m.

The investment is part of Absa Capital’s strategy of increasing its exposure to the boom in infrastructure development on the continent.

J&J Group’s 8% acquisition will also increase the black empowerment shareholding in the Bombela consortium, which holds the 20-year concession for the design, building, part- finance, operation and maintenance of the R25bn Gautrain rapid rail project.

J&J Group is a black economic empowerment investment and management company with interests in the financial services, healthcare, IT and industrial sectors.

It was co-founded by former unionist and cabinet minister Jay Naidoo and Jayendra Naidoo, also a former unionist and the National Economic Development and Labour Council’s first executive director.

IEI and J&J Group bought their equity from Bombela’s international partners, Bouygues Travaux Publics and Bombardier Transportation, which each sold 8% of their shares in Bombela.

Bouygues, a French civil contractor and Canada’s Bombardier, however, will continue to hold 17% each in the consortium.

Sollie Nortjé, head of IEI at Absa Capital, said the deal was significant in that it made Absa Capital and J&J Group the first entities to acquire shareholding in Bombela since its incorporation by the original shareholders.

“Part of the initial arrangement between Bombela and the government was that the two international partners could each sell off 8% of their equity to local partners,” said Nortjé.

The investment by IEI is part of Absa Capital’s strategy of expanding its funding in infrastructure initiatives on the continent, he said.

“The acquisition of equity in Bombela is a reflection of our commitment to partner the Gautrain project as it rapidly moves from the planning stages to reality,” Nortjé said. “The IEI team focuses on equity investments in infrastructure projects throughout sub-Saharan Africa,” he said.

“However, it is particularly heartwarming to be committed to such a high-profile project in our very own backyard.”


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