Cyril Ramaphosa to divest stake in Shanduka

Cyril Ramaphosa, South Africa's deputy president and one of its most prominent businessmen, is to complete his divestment from Shanduka, his $1bn black economic empowerment group.

Mr Ramaphosa, who was appointed after May elections, has been seeking a means to exit the company - which has a diverse range of investments including a coal mining venture with Glencore, a stake in Lonmin, the London-listed platinum producer, and a holding in Standard Bank, Africa's largest - to avoid a conflict of interests.

A complex deal announced in May that would have seen Shanduka merge with Pembani, a smaller company established by Phuthuma Nhleko, another prominent businessman who chairs MTN, the mobile telecoms group, failed.

Under an arrangement announced on Wednesday, the Mabindu Trust, a non-profit entity set up in 2002 with a 2.5 per cent stake in Shanduka, will become its largest shareholder with 49.5 per cent.

The other two main shareholders, China Investment Corporation and Standard Bank, will see their stakes in Shanduka increase from 25.7 per cent to 33.6 per cent and from 13 per cent to 16.9 per cent respectively. CIC paid $243m for a 25.7 per cent stake in Shanduka in 2011 - its first investment in Africa.

Mabindu Trust will retain its role as a non-profit group supporting the development of small businesses with its stake paid for by the company through vendor financing, people familiar with the deal said.

Mr Ramaphosa, one of South Africa's richest black businessmen, held a 30 per cent stake in the company.

In a statement, Shanduka said it had disposed of "certain assets in non-regulated sectors" to Mr Ramaphosa, including properties and McDonald's South Africa. The group did not reveal the financial details, but it is understood Mr Ramaphosa will also receive cash under the deal, which is still subject to regulatory approval.

"Since our formation 13 years ago, we have built up a capable and experienced leadership team and skilled professionals," said Phuti Mahanyele, Shanduka's chief executive. "We will continue to pursue our vision of a black-owned and managed company creating value for all our stakeholders."

Given Mr Ramaphosa's profile and his position in government, as well as the scale and prominence of Shanduka's shareholders and investments, it was felt that he had to remove himself from the company to avoid any potential conflicts.

Shanduka said discussions between CIC, Standard Bank, Pembani and "other interested parties" were ongoing. A person familiar with the deal said Shanduka still needed a prominent black business executive to lead it.

"It's still a substantial company and it still needs a prominent black leader, someone with a lot of vision," the person said.

Mr Ramaphosa re-entered politics two years ago when he was elected deputy president of the ruling African National Congress. He was appointed deputy president after the ANC swept to victory in May and is a frontrunner to take over from President Jacob Zuma.

A separate statement from the president's office said Mr Ramaphosa's remaining business interests, all in unregulated sectors, would be being placed in an independent trust.

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