OLD Mutual Alternative Investments (OMAI), through its Hybrid Equity capability, a specialist in innovative financial solutions, has announced a transformative R125 million preference share facility to Afropulse Group, a wholly black women-owned investment holding company, to restructure its funding, which is backed by an equity interest in Imperial Logistics South Africa, one of the country’s largest logistics firms.
Abdu-Rahman Abrahams, co-head of Hybrid Equity, emphasised that the recent financial investment in Afropulse Group is more than just a financial transaction—it represents a realised commitment to transformation and empowerment.
“This strategic move aligns with the goal of fostering broad-based black economic empowerment and diversity in a sector crucial to the nation’s economic growth,” said Abrahams.
The transaction comes at a time when road freight operators in South Africa are advised to familiarise themselves with the Transport Sector Charter and the codes it serves to implement from March 1, 2024. According to the SA Road Freight News, the Charter will impact all companies rated under the current Transport Sector Codes. Companies must align their planning according to the new Transport Sector Codes or risk not receiving a compliant B-BBEE certificate.
As part of this initiative, a preference share facility was extended to Afropulse Group, supported by their 6.56% shareholding in Imperial Logistics.
Phumzile Langeni and Bongi Masinga, co-founders of Afropulse Group, said innovative funding mechanisms were vital to empower black women, an underrepresented group, in economic empowerment transactions.
“We have plenty of good policies and initiatives to promote economic empowerment, but historically disadvantaged groups may continue to be left behind without the requisite capital to fund their access. Afropulse Group’s partnership with OMAI is a landmark in our country’s journey towards economic inclusivity. This investment not only supports our stake in a vital industry but also propels the agenda of black women’s ownership in the South African economy.”
South Africa’s freight and logistics market is expected to grow significantly from 2024 to 2029 due to a substantial increase in online retail, according to a research study by Mordor Intelligence. According to Mordor, the South African freight and logistics market is estimated to reach US$22,92 billion in 2024 and is expected to reach US$30,56 billion by 2029, growing at a Compound Annual Growth Rate (CAGR) of 5.92% during the forecast period.
In addition to promoting equity ownership, the deal represents a strategic restructuring and replacement of existing funding, showcasing OMAI Hybrid Equity’s expertise in executing complex structured equity funding transactions. This restructuring will optimise Afropulse Group’s capital structure, further solidifying its position in the logistics sector.
Abrahams said that despite challenging economic conditions, this investment demonstrated continued confidence in South Africa’s strategic logistics sector.
“As this critical sector continues to grow and develop, it is essential that it embraces and facilitates transformation and empowerment to help fight economic inequality and promote inclusivity.”
In 2021, Hybrid Equity concluded a B-BBEE deal to assist in funding the Afropulse Group’s acquisition of a 6.56% shareholding in Imperial Logistics. As part of the overall transaction, Hybrid Equity provided preference share funding of approximately R112 million as part of a junior quasi-equity-related funding package.
