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Royal Bafokeng Holdings was eyeing more property investments, along with opportunities to break ground in the healthcare and education sectors.
All this while working on a joint $1.55 billion (R21 billion) oil and gas deal on the Horn of Africa.
CEO Albertinah Kekana told City Press this week during an interview that the company was diversifying its interests after a decision to do so four years ago.
A community-based investment company, Royal Bafokeng Holdings is focused on growing the wealth of the 150 000-strong Royal Bafokeng Nation, based in Phokeng in North West, near Rustenburg.
The company was also an empowerment vehicle, said Kenana, a chartered accountant with investment banking and management experience. Before her current post, she worked for the Public Investment Corporation.
The move to diversify came as a result of the cyclical nature of the platinum sector and the need for the Bafokeng community to receive regular dividends.
Impala Platinum (Implats) – in which Royal Bafokeng Holdings has a stake – has not declared a dividend since 2013.
In April, the holding company reduced its stake from 11.3% to 6.3% as part of its diversification strategy.
Despite Implats not paying dividends, Kekana said this did not affect the Bafokeng community, which had “a cash buffer equal to three times what they spend, so it was able to continue sustaining its spending [on the community].
However, the community went through a process of reviewing its own programmes and spending,” said Kekana.
“The Bafokeng have a special history with the platinum assets. Medium- to long-term prospects for platinum are solid. We continue to work with other stakeholders to address other issues regarding platinum [including those pertaining to communities and labour],” Kekana said.
Royal Bafokeng Holdings has broad interests, mainly in South Africa, covering financial services, mining, property, energy, telecommunications, oil, gas and construction.
Its African investments are growing. Mining, Oil & Gas Services, a subsidiary of Royal Bafokeng Holdings, is involved in a joint venture with investment firm Black Rhino, which seeks to invest in transformational projects to develop a 550km fuel pipeline that will stretch from the port of Djibouti to storage facilities at Awash, 50km outside the Ethiopian capital of Addis Ababa.
Plans are under way for the pipeline to transport more than 240 000 barrels a day of diesel, petrol and jet fuel to meet the growing demand for refined oil products from both countries.
Kekana said that the pipeline builders were in talks with the two countries’ governments regarding which companies would use the facility, and she was hoping to achieve financial closure by the end of 2017.
Royal Bafokeng Holdings was looking to contribute $550 million but this was an early estimate, said Kekana, who hails from Atteridgeville in Tshwane.
At the Western Cape port of Saldanha, the holding company via its oil and gas unit plus its partners have spent R4 billion on two projects:
Africa’s largest open-access liquefied petroleum gas import and storage facility, and an oil tanking facility.
“We have a thematic focus on oil and gas infrastructure as an asset class. Our view is that there has not been enough focus on private sector investment in oil and gas infrastructure. Investment in the importation and transportation of hydrocarbons across the continent is a huge opportunity,” Kekana said.
The company’s most recent deal concerned buying four assets – spanning energy, property and construction – from infrastructure development group Aveng for R860 million.
Earlier this year, Royal Bafokeng Holdings bought a 30% stake in telecoms operator Neotel, in partnership with Liquid Telecom.
However, Kekana declined to say how much this would amount to. “There is talk of investing money beyond just the acquisition. Going into the acquisition, we recognise that to be competitive there is a need for further investment.”
Royal Bafokeng Holdings was involved in the process to buy Anglo American’s local coal mines, but withdrew, Kekana said. She declined to give reasons for dropping out.
Anglo is looking to sell Kumba Iron Ore. However, Kekana said Royal Bafokeng Holdings had no interest in Kumba.
