INTRODUCTION
In expectation that the Government of South Africa will continue with the program of restructuring non-core state-owned enterprises, three highly qualified professional services firms have pooled their resources to create a special purpose entity that is capable of providing the full range of advisory services related to the privatization of state-owned assets.

MEMBERS OF THE CONSORTIUM
The members of the consortium are:

Mchunu Koikanyang Attorneys
Founded in 2001, Mchunu Koikanyang Attorneys was formed to provide a high calibre of corporate and commercial legal advisory services to clients in order to assist them to find both meaningful and practical solutions to business problems. The firm has a special focus on serving emerging, growing and established business entities, state-owned enterprises and government departments. The specialist services include mergers and acquisitions, restructuring and privatization, public private partnerships, intellectual property law and due diligence investigations, among others.

Taurus Associates
Taurus Associates is a BEE business consulting firm founded by South African professionals from leading corporations and international management consultancies. Taurus provides business consulting services to corporates, government (departments and agencies), parastatals and investment organizations. Its consultants are South Africans serving South African organisations who are committed to serving the country and to achieving its economic and social goals.

Privatization Group International
The Privatization Group International LLC (PGi) is an international firm specializing in the structuring, financing and facilitation of privatization programs and projects. PGi is an US-based corporation with its principal office in Johannesburg, South Africa. PGi has attracted local South African strategic partners to seek out, structure and finance privatization transactions in South Africa, including full or partial divestitures of state-owned enterprises, public private partnerships and concessions.

The members of the consortium decided, on the basis of their respective core competencies and broad sector experience, that there was a natural combination of skills that could offer the Government of South Africa a comprehensive solution to the effective and successful completion of sale transactions.

While there are many well-known investment and merchant banks which focus on mergers and acquisitions, few have the specialist experience required for privatisation transactions, and fewer still have broad experience in South Africa. The members of STA (Specialist Transaction Advisors) have a unique appreciation of the process, based on a combined depth of experience across a broad range of state-owned enterprises. In addition, each entity has had an advisory relationship with the Department of Public Enterprises and has thus developed an intimate understanding of the restructuring process in South Africa.

STA is an empowered entity, whose principals and staff have graduate degrees and qualifications from top tier universities in the US, UK and South Africa, as well as experience with leading global businesses and professional service firms.

STA's relevant skills and expertise include:

  • Business valuation
  • Legal due diligence investigation
  • Commercial due diligence investigation
  • Business and financial analysis
  • Data room preparation and management
  • Drafting of transaction documentation
  • Corporate governance
  • Tax advisory
  • Employee share option schemes
  • Regulatory and sector review
  • Labour and employment issues

STA is under no illusion regarding the difficulty of successfully completing transactions in the complex South African environment. However, we are a results oriented team and will provide creative solutions to complex issues. We will not simply provide a “plain vanilla” sale or transaction process.

PROPOSED STRATEGY
Our proposed strategy combines the following elements:

  • Assist the DPE or other agency, as appropriate, to understand the market perception of the sale asset and likely vision of potential bidders to create value
  • Assess the endogenous and exogenous issues (political, economic and other) of the sale and their possible impact on the sale process
  • Provide a range of options on sale process and timing, with a specific recommendation
  • Provide a financial and commercial analysis of the business, including a limited due diligence and valuation, and indicate to the client the specific issues that must be addressed in the sale process
  • Advise on BEE and employee issues related to the sale
    • Prepare transaction documentation
    • Advertisements and notices
    • Requests for proposals
    • Information memorandum
    • Draft sale agreement
  • Conduct sale process
    • Receive and evaluate expressions of interest
    • Develop short list and issue RFP
    • Oversee bidder business investigation process (data room, etc)
    • Receive and evaluate proposals
  • Recommend preferred bidder
  • Negotiate sale agreement, conditions and payment
  • Close transaction
  • Develop monitoring process to ensure conditions are met and provide data for future analysis

RANGE OF CAPABILITIES
The chart below demonstrates our combined range of capabilities and experience related to public enterprise restructuring and performance management:

Overview of STA Experience in the Public Enterprise Sector

Enterprise/Agency

Type of Engagement

Service Provider

Arivia.kom

Legal Advisory: Intellectual Property

MK Attorneys

ACSA

Legal Advisory: Employee Incentive Scheme

MK Attorneys

Eskom Enterprises

Transaction Advisory: Rotek and Roshcon

MK Attorneys

Eskom

Legal Advisory: Environmental

MK Attorneys

Eskom

Cost Reduction; Divestiture Analysis

Taurus

Department of Public Enterprises

Drafting of Protocol on Corporate Governance

MK Attorneys
PGi

Department of Public Enterprises

SOE Performance Monitoring

PGi

Department of Public Enterprises

Valuation

Taurus

Foskor

Legal Advisory: Contracts

MK Attorneys

South African Airways

Legal Advisory: Foreign Investment

MK Attorneys

SITA

Organisational Redesign Performance Management

Taurus

Roshcon

Bid Advisory (BEE)

PGi

Voltco
(Denel Subsidiary)

Bid Advisory (BEE)
Negotiation

MK Attorneys
PGi

Apron Services

Bid Advisory: (Foreign Investor) Due Diligence

MK Attorneys
PGi

Our unique capabilities derive from the types of engagements we have completed:

Advising SOEs on performance management
As a group, we understand the unique problems facing public enterprises and the environment in which they operate. In a process of divestiture, we are therefore able to focus more appropriately on areas of future value creation and their effect on price and sale conditions.

Advising the Department of Public Enterprises
Each member of the consortium has advised the DPE independently, and are thus cognizant of the Department's mission, strategy and procedures.

Transaction Advisory
MK Attorneys, principally, has advised on transaction matters and drafted sale documentation. Taurus has assisted one SOE with the selection criteria for divestiture candidates. A principal of PGi has advised other governments on the privatisation process and participated in several transactions.

Client Bid Advisory
We have advised foreign and local clients on several acquisitions, and thus understand private sector perceptions on the quantification of value, due diligence issues, warranty concerns, and raising capital for the acquisition.

STA PRINCIPALS

Nkosinathi Titus Mchunu (Partner)
Qualifications
BA, L.L.B - University of the Witwatersrand

Experience
Titus served articles of clerkship at Werksmans Attorneys from 1996 to 1997 after which he was appointed as a professional assistant in both litigation and commercial departments. In 1999, he joined Deloitte & Touche as a manager in the Electronic Law Solutions unit of the Business Law Solutions Division. Thereafter, he joined ABSA briefly as a legal adviser in its legal department. Titus has acquired extensive experience in various areas of law, including general corporate and commercial law, information technology law, intellectual property law, outsourcing, mergers and acquisitions, privatisation and restructuring of state owned enterprises, corporate governance, employee share ownership plans and commercial litigation. He has advised, and continues to successfully advise, clients in the public and private sectors on all of the above mentioned areas of law. He is also a member of the Audit Committee of the Local Government Water and Related Services SETA.

Olckers Chopologe Koikanyang (Partner)
Qualifications

B.Proc and L.L.B - University of the Western Cape

Experience
Chopologe joined Mallinicks in 1995 and remained there until January 2002. He was appointed a partner in the commercial and property departments from September 1998 until February 2002. He then joined Mchunu Attorneys in February 2002 to establish Mchunu Koikanyang Attorneys.

He has acquired extensive experience in various areas of law, including general corporate and commercial law, mining law, communication/media law, environmental law, mergers and acquisitions, privatisation and restructuring of state owned enterprises, corporate governance, employee share ownership plans, conveyancing, commercial property and commercial litigation. He has advised, and continues to successfully advise, clients in the public and private sectors on all of the above-mentioned areas of law.

Athol Williams (Managing Director)
Qualifications

MSc (Finance) – London Business School, UK
MBA – MIT Sloan School of Management, USA
BSc (Engineering) – University of Witwatersrand

Experience
Athol is the founder and Managing Director of Taurus Associates, which employs 12 professional business consultants. Athol has extensive experience in strategy and finance. Before founding Taurus, he was the Group Strategy Executive for Old Mutual. Prior to Old Mutual, Athol was with international strategy consulting firm Bain & Company, working in Boston, New York and London. At Bain, Athol focused on advising private equity firms on pre-investment due diligence and post-investment investee strategy development. He also worked with a number of major multinationals, developing their business strategies and advising them on the economics of major capital investments. Athol's private equity and investment advisory experience covers a broad set of industries including microelectronics, telecommunications, chemical processing, industrial equipment, medical surgery, retail, consumer products, mining, power utilities and IT. Athol also spent two years with Rio Tinto (formerly RTZ) in London, advising the investment committee on all commercial aspects relating to investments in their coal and industrial minerals businesses worldwide. He advised on acquisitions, mine expansions, new capital requirements and divestments in the USA, Australia, Indonesia, India and Zimbabwe.

While at Taurus, Athol has consulted to senior officials and CEOs of South African national government departments, state-owned enterprises, private sector companies and investment firms in the areas of strategy, operations improvement and investment evaluation. His clients have been in the telecommunications, financial services, property, engineering and IT sectors.

Bruce Ellison (Manager)
Qualifications

BSc – University of Durham, UK
Special Diploma in Social Science (Economics) – Oxford University, UK
MBA – University of Cape Town

Experience
Bruce gained extensive strategy consulting experience with Bain & Company in Johannesburg and London, as well as Pyxis Capital Management and Decipher, before joining Taurus. Bruce's client experience has been in strategy, process reengineering, sales and marketing strategy, Balanced Scorecard implementation, operational effectiveness and organizational design. He has worked with clients in both Revenue and Customs at the South African Revenue Services, as well as in the broadcasting, motor manufacturing and banking industries.

Jeffrey L. Jackson (Managing Director)
Qualifications

BA Columbia University (Economics)

MA Johns Hopkins School of Advanced International Studies
Postgraduate Studies: Oxford (UK) UDC (Washington, DC)

Experience
Jeffrey Jackson is currently the managing director of the Privatization Group International, LLC, a firm which specializes in advising governments and businesses on the privatization process in emerging markets. Prior to that, he was a senior associate at Deloitte & Touche Emerging Markets Group, where he served as a Corporate Finance Advisor on a USAID-funded privatization project. Prior to joining Deloitte in 1997, he spent six years in southern Africa, based in Swaziland. From 1991-1994, he served as the Director of the Public Enterprises Unit in the Ministry of Finance, where he advised senior Government officials on parastatal reform and monitoring, privatization and restructuring. In that capacity, he also advised the Minister and other senior officials on a wide range of economic policy issues, and assisted in the drafting of legislation for the regulation of insurance and capital markets.

From 1994-1997, Mr Jackson performed a number of consultancy services in Swaziland, Zimbabwe and South Africa. During this period, he assisted in forming the first unit investment trust in Swaziland.

Mr Jackson's overseas experience includes work in Botswana, Lesotho, Somalia and Zimbabwe, as well as the Caribbean where he worked in the areas of privatization, enterprise development and investment promotion.

Earlier in his career, Mr Jackson held positions with the International Monetary Fund, the US Treasury Office of the Assistant Secretary for International Affairs, and the House of Representatives Committee on Budget. He served on the adjunct faculty at the University of the District of Columbia, finally as Adjunct Assistant Professor. In South Africa he was an adjunct professor at the Wits University School of Business & Economic Sciences.

Mr Jackson holds degrees from Columbia University and Johns Hopkins University (SAIS). Additional studies were undertaken at Oxford University and the UDC Graduate School of Business.

Alan Bowser (Director)
Qualifications

BA, Princeton

MA, Johns Hopkins School of Advanced International Studies
JD, Georgetown University Law Center

Experience
Alan Bowser, an attorney in private practice, is former United States Deputy Assistant Secretary of Commerce for Basic Industries. In this capacity, he had senior responsibility for promotion of exports of US companies in the “basic” American industries, including energy and power, iron and steel, wood and paper, chemicals, industrial machinery, motor vehicles, and other important economic sectors.

He has extensive professional experience as an economist and international policy analyst in the public and private sectors, as well as extensive experience in privatization, industry restructuring, overseas market development, and regulatory and legal reform.

Working with the US private sector, Mr Bowser has provided essential support for US power generation projects in China, India, Mexico, and Brazil; international mass transit projects in South East Asia; and agribusiness projects in Russia and Kazakhstan.

Mr Bowser has served as a senior consultant to the World Bank Group, and as an international economist in the US Department of the Treasury and the Executive Office of the President. He is a former Director of the Petroleum Finance Company, Ltd., in Washington, DC. Mr Bowser holds degrees from Princeton University, the Johns Hopkins University (SAIS), and the Georgetown University Law Center .

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Contact Information

Mchunu Koikang Attorneys

Attention : Titus Mchunu, Partner

Tel: (011) 788-4060

Fax: (011) 442-6376

Email: titus@mchunu.co.za

Website: www.attorneys.co.za/mchunu

 

Taurus Associates

Attention : Athol Williams, Managing Director

Tel: (011) 480-4900

Fax: (011) 480-4942

Email: aw@taurusassociates.com

Website: www.taurusassociates.com

 

Privatization Group International

Attention: Jeffrey L. Jackson

Tel: (011) 325-4452

Fax: (011) 325-4060

Email: jeffjac@global.co.za

Website: www.southafricaprivatization.com

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