News

Solethu acquires a 25% shareholding in Racec Limited in order to grow its footprint in rail and logistics

15 June 2009 | Cape Town


RACEC Group Limited, the AltX listed rail and electrification infrastructure solutions company, today announced the details of an agreement which it has entered into with Solethu Investments, a black economic empowerment investment company.

Solethu Investments, through its recently established wholly-owned subsidiary and special purpose vehicle, Solethu Civils, will acquire a 25% interest in the increased share capital of the company by way of subscription for 34 615 384 ordinary shares in the issued share capital of the company at an issue price of R1.30 per share for an aggregate subscription price of R45 million. The proposed Solethu transaction will ensure that the BEE shareholding objective is addressed as subsequent to the transaction, 25% of the issued share capital of the company will be held by Solethu Civils.

“We are delighted to have reached an agreement with Solethu which has the potential to create enormous value for all parties,” explained Charles Harrod, Chief Executive Officer, RACEC Limited. “Solethu is strategically positioned in the rail logistics industry and by cementing our relationship, we deliver on our strategic imperative of becoming a leading provider of rail and electrification solutions. It also enhances our transformation imperatives by introducing a substantial black shareholder to the listed entity, RACEC Group. This complements our multi-faceted approach to broad based black economic empowerment which has been in place for a number of years.”

Solethu Investments was established in 2001 by Ted Zulu as RRL Holdings (Proprietary) Limited, and is a 95% black controlled and 80% black owned and managed investment group whose core investments are focused on road, rail, sea and related industries, with operations that range from manufacturing, repairs and maintenance to logistics services.

Solethu Civils, a wholly-owned subsidiary of Solethu Investments, is a newly established special purpose vehicle designed to house Solethu Investments’ shareholding in RACEC. Solethu Civils was established to facilitate the funding of the Solethu transaction.

“We are very excited about partnering with RACEC as a shareholder in the group, as well as partnering with the RACEC Employee Trust staff workers trust who are already empowerment partners in  the underlying businesses. We believe that through our experience in the road, rail, sea and related industries we will be able to add value to this investment and help to extract value for all RACEC Stakeholders,” concluded Ted Zulu, Chief Executive Officer, Solethu Investments.

Formation of Solethu

Solethu Investments has been formed which has enabled Vunani Limited and Stephen Smithyman to join Solethu. Ted Zulu the major shareholder of Solethu started RRL Holdings in 2001 which is now the back bone of Solethu. He also completed an Investment in Bridge Shipping in 2004. Through his commitment he has grown these businesses. Solethu was then conceived by Ted as the basis for attracting additional skills to his business and thus allowing him to add value to his existing investments and by also enabling Solethu to grow through investing in other growth companies where Solethu can add value.