SAWIT withdraws from KWV empowerment transaction

The South African Wine Industry Trust (Sawit) has decided to revoke its loan of R135m to the black empowerment group Phetogo Investments, who obtained 25.1% of the KWV more than two years ago.

Phetogo's interest groups include the Black Association of the Wine and Spirits Industry (BAWSI), the KWV Employees Investment Trust, the Epa Development Group, South African Liquor Traders Association, the National Farm Workers Union of South Africa, Phetogo Investment Holdings and Kumnandi Liquor and Leisure Investments.

The Phetogo transaction was originally supported by Sawit in order to drive actual black empowerment in one of South Africa's largest wine businesses, by ensuring that the shareholding of the KWV changes, especially in order to give the company's workers a greater say in the KWV. According to Sawit chief executive, Charles Erasmus, Sawit holds an enormous degree of accountability as the organisation responsible for driving black empowerment in the South African wine industry.

"As with all projects in which we become involved to make the wine industry more representative of the national population and to create a better dispensation of people in the industry, Sawit was duty bound to ensure that its involvement with Phetogo Investments achieved actual results. Sawit appointed a respected group of business consultants to analyse Phetogo's effectiveness as a black empowerment vehicle within the KWV and to see if it met with the initial expectations which Sawit had fostered.

One of the findings from the report was that Phetogo's interest groups did not succeed in working together as an integrated unit in pursuing their shared motives and social objectives. According to Erasmus this was by no means a random decision.

"We are currently however busy in negotiations where possible investors will be found to take on the financial role which Sawit has previously played. There are many organisations which would possibly be interested in becoming involved with Phetogo which do not have the broad based responsibilities which Sawit has," said Erasmus.

(Source: www.wine.co.za 10 July 2006)

 
 


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