In South Africa, we tend to be somewhat bi-polar. Some days we are rainbow-nationists and on others we are revolutionaries. Yet sometimes we miss the good news stories that emerge in the middle.
I’d like to introduce you to JSE-listed special purpose acquisition company (Spac) Hulisani, which I believe has the potential to be an industrial conglomerate in the coming years. For those not familiar with the purpose of a Spac, they are listed vehicles which arrive on the JSE with no assets but an intention to raise money and invest in ‘viable assets’.
In effect, these are a straight bet on management to realise value for shareholders, that beats the return of cash in the bank. In the case of Hulisani, management has just made a R140 million deal which will – assuming it gets shareholder approval later this month – see it secure 6.6% of the Kouga Wind Farm which has a 20-year power supply agreement with Eskom.
Very few people spotted this announcement on September 23 2016, that Hulisani was attempting to raise an incredible R4 billion to invest in energy and infrastructure projects in South Africa. This followed on from the R500 million that the company raised when it was listed in April 2016.
For a country such as South Africa which requires huge capital investment, particularly in our energy sectors, the story is a great one. Infrastructure investments are great because they require a variety of new jobs for both skilled and unskilled labour and we all know how desperately we need these jobs.
But for me there is an even better story to be told – especially in light of the current happenings on university campuses – and that relates to the management of this business.
CEO Malungelo Zilimbola (46) – formerly of Investec Asset Management and RMB Asset Management – founded the highly-respected Mazi Capital. At 46 years of age, he’s gone from schooling in Mahikeng, a degree at UCT, to a listing on the JSE and this seems to be just the beginning for him.
Chief investment officer Marubini Raphulu (41) was schooled in Limpopo, earned degrees at the University of KwaZulu-Natal and Wits, has held a variety of high-profile investment banking and legal positions and is now driving a business which has the potential to drive huge change in South Africa.
The board includes two non-executive directors under 40, namely Fhedzisani Modau (39) and Asanda Notshe (34).
In a country where our predominantly-white business role models grab all the headlines, these are the kinds of role models that South Africans are crying out for at the moment.
Hulisani may well be the next industrial giant in South Africa. I’m betting on it; I’ve put some of my kids’ savings money into it and I’m hopefully going to participate in the capital-raising when it rolls around…. But for these role models to fulfil their potential we need to agree that we need to pull in the same direction.
Downgrades are not good for us. Destruction of our universities (and the failure to invest in quality talent), is not good for us.
The largest shareholders in Hulisani right now are:
- The Samwu (South African Municipal Workers’ Union ) National Provident Fund – 6%
- 27four Investment Managers – 6%
- Government Employees Pension Fund – 15%
- Eskom Pension and Provident Fund – 33%
These are ordinary government employees, Eskom employees and Samwu members, whose quality of retirement could be significantly boosted if Hulisani comes right.
South Africa is one of the noisiest democracies around, but amidst all the noise, we must be careful of missing some amazing stories. Hulisani is a potentially fantastic story, but it needs the environment to be one in which it can thrive. For those brave enough to try to grab the future, here is a multi-billion rand opportunity on our doorstep.