March 23, 2004

By Roy Cokayne

Pretoria - Blue IQ, the developer of the multimillion-rand Automotive Supplier Park in Rosslyn, is in negotiations with a private investment company over the sale of 90 percent of the development company.

This was confirmed last week by Jochen Freese, the managing director of the Supplier Park Development Company, which is 100 percent owned by Blue IQ, the development arm of the Gauteng finance and economic affairs department.

The park was officially opened last week by Gauteng premier Mbhazima Shilowa. About R200 million has been spent on infrastructure development in the park, with substantial further capital investments being made by tenants and suppliers.

The park is designed to group suppliers to the automotive industry to achieve optimal production through economies of scale.

Freese said the negotiations with the private investment consortium followed an advertisement placed last year calling for expressions of interest in investing finance and expertise in the park.

Progress was being made but the negotiations were complicated. It was hard to say when they would be completed.

"They [the negotiations] will probably take a few months to finish completely," he said. 

If the negotiations were successful, responsibility for the further development of the park would shift to the investment consortium.

However, he said, it would now also be possible to get banks to finance the development of further projects in the park "building by building".

There was enough income from rentals and the levy for the continued success of the park, he said.

About half of the 60ha site on which the park was being developed was already built up.

Jabu Moleketi, the Gauteng MEC for finance and economic affairs, said the park required a capital injection of between R600 million and R800 million from private and institutional investors to reach full maturity.

Freese said the sale of 90 percent of the shareholding in the Supplier Park Development Company would ensure the sustainability of the long-term development of the park.

He said a value had not yet been placed on this shareholding.

Blue IQ had set the goals of the park and if it believed these goals were sustainable, it might decide to sell 100 percent of its shareholding.