For many of our clients’, Ownership represents the most challenging element of B-BBEE Scorecard. Parting with equity and the associated loss of control, for family owned, privately held or multinational businesses is emotional and often not a consideration.
A fluid legislative environment and the challenge of identifying suitable Empowerment Partners aligned to your company culture, values and with access to capital compound the challenges associated with Ownership.
Without Ownership, 25 points are lost and your company will be discounted an Empowerment Level.
To achieve Level 4 or better, without Ownership, is extremely expensive or impossible.
Ownership, structured correctly, can turn Empowerment into a competitive advantage.
Ownership features in both the Ownership element as well as in the Preferential Procurement. Companies are directed to do business with suppliers that have specific Ownership attributes (e.g Majority Black Owned, >30% Black Woman Owned).
The more Preferential Procurement points you can deliver to your customers the more attractive you are as a supplier. The impact of this is much more important than BEE level.
Empowerment level determines spend recognition. Level 4 has a spend recognition of 100% vs 135% of a Level 1. This 35% pick up is the incentive of doing business with a more Empowered company. 35% is very little given the cost of moving from a Level 4 to 1.
A company that is Majority Black Owned and at least 30% Black Woman Owned will deliver almost 12 times the number of Preferential Procurement points than a competitor of the same level.
A pick up of almost 1,200% vs 35% of Level 1 to 4.
The decision to embark on a B-BBEE Ownership transaction, like any other corporate finance transaction, should be built on an investment case.
The projected returns must warrant the investment of time and money.
There are many different Ownership options available.
Selecting the most suitable option will depend on several variables:
Unfortunately, many Ownership solutions sold to clients are non-compliant. The seller of the solution is not liable and all risk falls to the client. Even an unsubstantiated charge of fronting (BEE fraud) may damage a company’s reputation beyond repair.
Quiver Tree Capital’s solutions have been signed off by all the major Verification Agents and several are registered on the BEE Commission’s Register of Major Transactions. Solved with certainty.
We have implemented well in excess of 100 transactions which have been:
Approved by B-BBEE Verification Agents
Registered by the B-BBEE Commission
Submitted to the Competition Commission and the Takeover Regulation Panel; or
Reviewed by major law firms
We are B-BBEE Ownership experts. We have designed solutions to meet the various requirements of our clients ranging from securing Ownership points and avoiding a discount through to Majority Black Ownership.
We have solutions aimed at QSE’s through to large family owned and multinational companies.
We ensure meaningful transformation is delivered and that –
We have implemented well in excess of 100 transactions which have been:
Approved by B-BBEE Verification Agents
Registered by the B-BBEE Commission
Submitted to the Competition Commission and the Takeover Regulation Panel; and
Reviewed by major law firms
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