Clearwater Capital – one of the black economic empowerment unit holders in ApexHi Properties Limited - has acquired 80% of the C units held by the ApexHi BEE Trust in a transaction that sees four beneficiaries share R74,8-million profit only six months after the trust’s inception. 

ApexHi CEO Gerald Leissner says when ApexHi listed its C unit in October 2006, 30% of the C units were sold to BEE partners at a unit price of R2 per unit. Half of these units were held by Clearwater Capital – an investment company owned and controlled by the KwaZulu-Natal based Mehta family - and half by the ApexHi BEE Trust, representing CIDA Empowerment Fund, MaAfrika Tikkunn, Makhulong A Matala, Soul City Broad Based Empowerment Company and the DEC Investment Holding Company (DEC). 

“The trust was founded by ApexHi to reflect its commitment to broad-based black economic empowerment and transformation within South Africa, and aimed to create value for the beneficiaries over a period of about five years.

“The rapid increase in the share price of the C units has created an opportunity to unlock significant capital value for the beneficiaries which can be used to the benefit of their constituencies,” he says.

All the beneficiaries - except for the Disability Empowerment Concerns Trust (DEC) - have participated in the transaction and have received R18,7-million each. DEC CEO Mike du Toit says the DEC is a long term investor. “Our beneficiary base of black South Africans with disabilities is large, and our mandate is to develop a diversified high-value portfolio capable of yielding a substantial and sustainable flow of income. The ApexHi investment fits this mandate well,” he says.

Speaking on behalf of the exiting beneficiaries, Lerato Mashologu says the ApexHi BEE transaction has been exceptionally broad-based, having included five different developmental groups as beneficiaries to the BEE Trust, all of whom are engaged in various initiatives aimed at broad-based economic and social transformation of those in the “second economy”.

“The sale of the C units has allowed for significant and immediate access to future cashflows for each of the participating beneficiaries of the trust, and has allowed each of our organisations to make major strides towards achieving our developmental objectives,” she says.

Makhulong a Matala General Manager, Lindi Malinga says ApexHi’s original conceptualisation of the scheme via the unique mechanism of the C unit and its flexibility to allow the beneficiaries to take advantage of exceptional market growth, has provided a model for black empowerment schemes.  The company has taken the national BEE policy and utilised its business activities to support social objectives in a significant and tangible way.   We thank ApexHi for including us in these transactions and recommend its business practice to other companies,” says Malinga.

Following the transaction, 30% of the ApexHi C units still reside within the BEE structure, representing 10% of the voting rights in ApexHi. 90% of these units are now owned by Clearwater Capital – one of the largest voting shareholders in ApexHi - and 10% are owned by the ApexHi BEE Trust which is now only represented by the DEC.

Clearwater Capital Chairman, Harish Mehta, says the company is delighted to have acted as a catalyst in the transaction, which further strengthens the relationship with ApexHi. “We believe that ApexHi is well positioned in the property sector and that its asset base and highly experienced and competent management team will ensure that the exceptional returns generated for unit holders will be sustained for some period of time,” he says.