Sale of Asset – would this work for you?

Sale of Asset – would this work for you?

Sale of Asset Transaction‘Where transformation leads, compliance will follow’.

  • Are you a company looking to increase your B-BBEE compliant ownership in a truly transformative way?
  • Do you need help identifying a BEE partner that will be a natural fit with your company?
  • Have you identified an approved BEE partner, but you require financial assistance to implement a transaction?
  • Are you a multinational wanting to affect a BEE ownership transaction, but are constrained by parent company requirements?
  • Are you looking to sell a business asset, and want to know how to utilize that transaction to sustainably build the business of a Black Owned business partner?
 

— well, we have the solution for you: Let Advance Corporate Advisors help you achieve the full benefits of a ‘Sale of Asset’ transaction.

The South African government has stated definitively in recent months that its transformation strategy has been further developed to include support for Black Industrialists and the creation of Black Owned and Black managed businesses, as well as Radical Economic Transformation (“RET”). Considering a current lack of clarity about what RET will mean, we are clear that it does include more Government support for companies that are majority Black-Owned in its own supply chain.

The South African government and SOE satisfaction with minimum BEE achievement is waning. The competitive edge that was once achieved through an acceptable BEE accreditation level can now only be achieved through a compelling BEE story and an excellent scorecard.

However, because the B-BBEE regulatory environment allows entities to achieve full points on the BEE scorecard if they have a 25% black owned minority equity partner, there is understandably regulatory confusion on the part of corporates operating in South Africa. The question is “how to optimize participation in Government’s iteration of RET and the Black Industrialist programme, whilst still maintaining compliance with the Codes of Good practice?

The answer lies in a part of the Codes framework that has always been policy, but is only now finding traction in the market – although it has consistently been the most common form of BEE transaction implemented since the inception of the Codes – and that is the Sale of Asset” mechanism.

Implementing a sale of asset BEE deal for your company will allow you to be a part of the evolution of South African business in a positive way, through demonstrating support for the creation of wholly black owned and managed business enterprises, with owners and management fully capacitated to participate in the “business of business”, and take risk in making their own business successful and watching it grow. This is the next level of BEE!

The general principle is that if, “A Seller that has concluded a transaction involving a sale of asset, equity instrument or business of a separately identifiable related business, may claim the benefits provided for in th(e) statement in its own ownership scorecard.”

We have relationships with BEE investment houses, access to assets, access to funding, and we have implemented a number of these transactions successfully in the past decade.

If you think that this could be something that would be right for your business, contact Advance Corporate Advisors – email: lisa@advancecorporateadvisors.co.za Or  Tel: 010 591 2670.



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