Pretoria - The National Empowerment Fund (NEF) has approved expansion capital funding of R7.2m to Iglhaut-Allrad SA, a black empowerment company in the automotive industry.
The NEF's chief investment officer, Frencel Gillion, announced the initiative in Pretoria on Wednesday.
"We are proud to be making a contribution to this important initiative. We are pleased that this transaction is representing strong support for the advancement of Broad-Based BEE in a business in which foreign shareholders are invested and are confident in the future success of the business," said Gillion.
The company produces unique 4X4 conversion-technology which is patented by Iglhaut-Allrad Germany, the parent company, and converts Mercedes Benz commercial vans into Sprinter four-wheel-drive vehicles.
"I believe this is an important investment in the advancement of BEE. Not only does it encourage other entrepreneurs with viable business ideas to approach the NEF for funding, but more importantly for us, the investment will serve as an instrument to leverage the opportunity in Iglhaut," said Iglhaut's main BEE partner and executive chairperson Rudy Roberts.
Imperative part of business model
Roberts holds a 35% stake in the business, with 60% held by German shareholder, Michael Iglhaut, and the remaining 5% held in a trust for black staff.
Iglhaut said that at first his company did not understand the term or concept of BEE.
"However, we have not only come to accept BEE, but believe it is an imperative part of our business model to advance our enterprise in South Africa. It is our company policy to train as many black mechanics in our enterprise as possible, and to integrate them fully in our business." he said.
The technology will be sold to Mercedes-Benz SA Commercial Vehicle customers, which include the military, provincial health departments, utility companies, the SA Police Service and private sector clients through the Mercedes Benz Commercial Vehicle dealerships.