Primedia owns many media assets including Talk Radio 702, 94.7 Highveld Stereo, 567 Cape Talk, 94.5 Kfm, Primedia Outdoor, Ster-Kinekor, ComutaNet, Primedia Unlimited, Primedia Sport and Primedia In-store (see www.primedia.co.za).
The partners see the deal, which gives the empowerment partners almost 50% ownership of the media company, as more than simple ownership, but a move towards the transformation that empowerment deals are intended to facilitate.
“Transformation is a belief system, not a scorecard,” said Primedia CEO William Kirsh, “and if you have the belief, which we do, the scorecard is easy.”
Paul Nkuna, CEO of MIC ,concurred: “This deal takes BEE to the next stage as a black-owned company takes ownership and operational control of one of the best media companies in South Africa, and shows us to be strong business players with skills honed over the almost 12 years we have been invested in the company, rather than just a necessary empowerment partner.”
First discussed in July
The deal was first discussed in July, as changing economic circumstances made it imperative for Primedia to restructure its capital structure. “MIC already owned 32% of the company, and we saw this as a great opportunity to strengthen our black economic ownership,” said Kirsh.
He pointed out that Primedia has always led the way in transformation; when it was listed, the company ranked 13th overall and first for three consecutive years in the media sector in the Financial Mail Empowerdex Top Empowerment Companies survey, based on its BEE credentials. “However, initially this was mainly through employment equity and scorecard factors other than ownership,” he added. “This deal brings our black ownership in line with the transformation principles we live out in the workplace.”
For MIC, the deal was part of a strategy to target certain investments that would show the company as a serious business partner and a significant player in the media industry. “Empowerment is not an event that will come to an end,” reflected Nkuna, “it's about creating a legacy and we hope that this deal paves the way for more like it”.
“This deal benefits both our company, and our partners,” said Kirsh, explaining that transformation has become a requirement for doing business in South Africa. “This deal helps us do business better and strengthens our country.”
