The Ikamva Labantu Empowerment Trust has bought 50,1% of Itec, and will use its share of the profit Itec generates to help community bodies.
CEO Jacques Duyver said Itec had spent three years seeking a black partner that would genuinely benefit underprivileged people. “Itec met many potential partners, but we did not want a partnership that would enrich one or two individuals. We wanted a broad based agreement that would impact the lives of thousands of underprivileged people.”
The deal would also help Itec and dealers it supplies to win more business by raising their black shareholder profile as well as their contributions to corporate social responsibility and skills development.
Chief financial officer Bruce Arnold said the transaction was structured through an interest free loan the trust would pay off over three to five years.
“We could never expect them to pay for it, so we came up with a way they get money from day one as opposed to paying us. It’s the best way for us and a good deal for them,” he said.
Ikamva Labantu works with community groups to help them become self-sufficient, focusing on primary healthcare, education and skills development, food and enterprise development, and land and buildings.
More than 65% of those who benefit are black women.
“We work with the most vulnerable members of the community until they no longer need us,” said MD Sipho Puwani. The deal created a revenue stream that would let the trust plan up to five years ahead by reducing its reliance on erratic donor funding, he said.
Itec conducted a due diligence study to ensure the organisation was structured in a way that guaranteed the money would reach those needing it.
“Enabling people to empower themselves is the best foundation for sustainable growth,” Duyver said. “Ultimately, we want the people whose lives are touched by Ikamva Labantu to become our customers.”