BEE Ownership option for Multinational Companies
Ownership Solutions provides BEE Ownership Advisory services to multinational companies that are committed to complying with Broad-Based Black Economic Empowerment.
We have designed a unique product that is an alternative to the Equity Equivalent Programme, allowing you to achieve Black Ownership in your multinational corporation without selling equity.
We deliver this service in conjunction with Webber Wentzel, one of South Africa's leading law firms.
Ownership Solutions add value through maximising the business empowerment points of your business while ensuring stakeholder buy-in to drive profitable growth. Unlike other providers, we partner with you for the life of the initiative, ensuring that all legal, financial and regulatory requirements are met, thereby offering total peace of mind.
Solutions
The Equity Equivalent Programme as an BEE Ownership option for Multinationals
The proposed Equity Equivalent Programme by the Department of Trade and Industry (dti) appears to be an attractive solution to multinational companies wishing to achieve BEE ownership points. The programme involves multinational companies undertaking significant Socio-Economic Development or Enterprise Development initiatives. Contributions are based on 25% of the value of the business and may be rolled out over a 10-year period. Following the compilation of a comprehensive and detailed Equity Equivalent plan by the company, approval by the DTI is required in terms of the size of the contribution and the actual projects undertaken. In practice, the implementation process has proven to be lengthy and costly, but if ministerial approval is granted, and the plan is properly implemented, the programme presents significant public and stakeholder relationship benefits for the company.
A Charitable Trust focussing on education and development of historically disadvantaged persons appeals to the ethos of multinationals and provides real socio-economic benefit
A Charitable Trust which has an effective equity stake in the business, but is a passive shareholder, has the same socio-economic impact as an Equity Equivalent Programme. At the same time, the Trust delivers the same or better ownership points. This option is being utilised by a number of multinational companies that previously were not able to implement equity deals due to international policies. The notion of contributing to the education and development of local communities appeals to the headquarters of multinationals since the intent aligns with the corporate ethos of many companies and that is to build the industries in which they operate. The flexibility that can be included in the structuring of the Trust also satisfies the risk and governance requirements of most headquarters.
An attractive solution for multinationals which combines the benefits of the Equity Equivalent Programme and Charitable Trust
Ownership Solutions in conjunction with one of South Africa's leading law firms, Webber Wentzel, has designed an ownership solution which has all the benefits of a Charitable Trust without the Trust owning equity in the firm. The structure is extremely flexible and allows the company to attain BEE ownership points while contributing to the education and development of historically disadvantaged South Africans. Larger multinational companies have found this solution to be very attractive and a number are presenting the solution to their head offices for approval.
Ownership Solutions can assist your company with analysing and implementing an optimal ownership structure
Ownership Solutions follows a three-step approach:
- High level comparison and feasibility analysis of the ownership options;
- An in depth analysis of the feasible BEE Ownership options in terms of cost, ease and timing of implementation, risk and BEE Ownership points; and
- Implementing and rolling-out the selected optimal structure.