Didata bet pays off

2012-09-15 13:56

Andile Ngcaba’s consortium now owns 20% debt-free R1.26bn in country’s top IT firm

The investment bet by Andile ­Ngcaba’s Convergence Partners in global IT firm Dimension Data ­(Didata) has paid off handsomely.

The consortium that he stitched together in 2004 and led into a black economic empowerment (BEE) deal with Didata is now the owner of a 20% debt-free R1.26 billion in the country’s largest IT company by revenue.

Ngcaba has joined a few wealthy black tycoons who have recently struck gold in matured BEE deals reached nearly 10 years ago.

In the wake of the global economic recession, many BEE deals sunk and had to be refinanced, while others saw shares being ­attached by creditors.

In July, City Press reported that a consortium led by Litha Nyhonhya’s Regiments Capital was a holder of a 5% debt-free stake in fast-growing lender Capitec Bank.

The Capitec stake is worth R1.1 billion.

The publication also reported in early August that a group of black investors in Absa Bank, led by Tokyo Sexwale’s ­Mvelaphanda Group, had discussed a special resolution to cash in their shares in the bank, which are worth R2.2 billion after tax.

However, Ngcaba has indicated that Convergence Partners will not be selling its stake in Didata and will instead live on dividend ­payouts.

About 2 227 disadvantaged ­Didata workers that were included in the transaction were paid out last week.

Saki Macozoma’s Safika ­Holdings was also a member of the consortium, but sold its 5% stake two years ago to Convergence Partners and Didata.

“We believe in Didata’s story and we will reinvest the money back ­into the company,” said Ngcaba, who is a former director-general of the department of communications.

After leaving the department in 2003, Ngcaba quickly amassed an impressive portfolio of investments in the information technology and telecoms space, snapping up stakes in fixed-line operator Telkom, cellular operator Vodacom, subsea cable system Seacom, terrestrial fibre player ­FibreCo, WiMax solutions provider ComSol, software company Britehouse, smart cards provider ­Gemalto and Nedbank.

But Didata is the crown jewel in his empire, thanks to its footprint in 52 countries globally.

Ngcaba has since disinvested in Telkom, which he partially bought into in 2005 as part of the Elephant Consortium that clinched a 7.2% interest.

“We long sold at Telkom because we did not believe in their story,” he said.

When cellular giant Vodacom was still part of Telkom’s empire, the company at one point reached an all-time high of R101.8 billion market capitalisation on September 3 2007, but today it is worth R9.4 billion.

Telkom is facing a R4.5 billion fine from the competition commission for anti-competitive behaviour and is under financial strain. In June, it reported a 33% drop to R1.65 billion in its headline earnings and a 93% plummet in after-tax profit to R179 million.

In 2007, Ngcaba’s personal ­fortune was estimated to be R420 million.

But he neatly sidestepped a question from City Press about whether he had grown his wealth over the past few years.
“I don’t want to focus on that,” he responded.

Ngcaba clinched some of his ­biggest deals before Thabo Mbeki was ousted by Jacob Zuma as the president of South Africa and the ruling ANC.

There have been rumours that businesspeople, whose meteoric rise was linked to Mbeki’s presidency, were outcasts under the ­Jacob Zuma administration and were shut out of lucrative deals in the private and the public sectors.

But Ngcaba dismissed this assertion as untrue, at least for him.

“Regardless of who is in power, it has no bearing on us . . . We are concerned about the growth of sales and revenue, not politics.

We also grow businesses in places like the Middle East and South ­America,” he said.

He said he would remain invested in what he knows best, the information and communication technology (ICT) market, and has no intention of venturing into ­mining or other ­sectors.

“My knowledge and background is in ICT and I have been in the ­industry for the past 20 years.

“I will continue to be in this ­industry for the rest of my life,” said Ngcaba, who is an executive chairperson of Didata’s Middle East and African operations.

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