NGO’s hit the jackpot
“I come here cap in hand in appreciation of the work done by Ditikeni”, said Min Trevor Manuel, at a celebration held for 22 NGO’s who have ‘hit the jackpot’ with their investment in Ditikeni, the broad-based empowerment investment company.
Thanks to the sale of its investment in Stanlib Asset Management, Ditikeni has paid dividends to the 22 NGO’s amounting to over R4 million.
“We must appreciate the hard role played by Ditikeni,” said Manuel, “to break the mould and go down the untravelled paths of the country. Ditikeni and the NGO’s are the real heroes. We need to get back to the core values set out in the RDP in 1994. Reconstruction and development needs to be people centred and people driven, combining growth with development,” he said.
“NGO’s play an important role in building the social capital vital for the future of South Africa,” said Manuel.
“Four years ago the Finance Minister, Trevor Manuel, challenged Ditikeni to ‘engage with the system’ by making sure that broad-based investment returns actually reached the most needy in the community,” said Sahra Ryklief, Ditikeni’s chairperson, “and we have done just that.”
Ditikeni’s shareholders are now seeing the fruits of their initial R2.8 million investment. The maiden distributions to shareholders amounted to a 142% cash return on their original capital investment.
“Over four million rands have been distributed to our shareholders during the past financial year for use in their grassroots empowerment programmes,” said Ms Ryklief.
“Furthermore we are committed to ongoing sustainable financial distributions and anticipate declaring an annual distribution of 20% of original shareholders’ capital, economic conditions permitting,” she said.
It is hoped that this percentage will grow over time as more investments are realised. This regular payout allows NGO’s to take control of their budgets and secures them an inflation-beating, and more importantly, a predictable income stream.
This distribution was sparked by the sale of Ditikeni’s 1.625% stake in Stanlib Asset Management during 2007 which transformed Ditikeni’s finances. The sale arose from the acquisition by Liberty Group of the shares it did not already own in Stanlib, a move intended to strengthen its position in the asset management market. Safika Holdings facilitated the Stanlib deal.
Ditikeni’s beneficiaries have received a return of their original investment and significant capital value has been left in Ditikeni. The balance of the Stanlib proceeds have been dedicated to a dividend fund, working capital and future investments.
In 2001 the NGO’s invested R1.1 million in Ditikeni. This was followed by a rights issue in 2003 which raised a further R1.7 million. Ditikeni shares were bought for R1.00 each and have now achieved a tangible net asset value of R10.00 each. The annual compound return to shareholders is 44%, counting distributions and the increase in NAV.
The 22 shareholders received a payout in proportion to their initial investment. Among the largest beneficiaries are the Social Change Assistance Trust (SCAT), the Trust for Community Outreach and Education (TCOE), the Labour Research Service, the Black Sash, the Association for Rural Advancement, the Centre for the Study of Violence and Reconciliation and the New World Foundation.
Ditikeni is also celebrating several new deals, including a beneficial interest in Brimstone Investment Corporation Limited and 2.5% of Equillore, a leading provider of arbitration and dispute management services.
Ditikeni has raised a further R21 million in capital from three leading Cape Town institutions which have taken up the offer of preference shares issued on a draw down basis. They are Metropolitan Asset Managers, the Old Mutual (South Africa) Foundation and the Pick ‘n Pay Charitable Foundation.
A further R29 million is being sought from other institutions, with the Second Closing scheduled for 30 June 2008. Ditikeni has pledged to co-invest 10% of the total amount raised.
This capital will be used to make further empowerment investments on behalf of the 22 NGO’s where cash is required.
Apart from Brimstone and Equillore, Ditikeni concluded further successful investments during the year with the Kelly Group (5%) and Maitland Fund Services (10%).
Contact: Ann Wallis-Brown
Tel: 021 462 0416
On behalf of:
Ditikeni Investment Company
Contact: Gordon Young
Cell: 082 928 0028