Mara Phones at a Gauteng government handover event, in 2020. (Photo by Sharon Seretlo/Gallo Images via Getty Images)
- An agreement to purchase the Mara Phones factory in Durban was concluded on 29 June.
- A management buyout process was given the green light last month by Mara’s creditors, the Industrial Development Corporation (IDC), and Standard Bank.
- The deal will see Lebashe Investment Group take a significant stake in the business.
- The entity is now owned by Mara’s buyout team, Sylvester Taku, its local MD, and Mabuti Radebe, Lebashe Investment Group and an entity called MPSA projects.
- The company will now focus on reopening the factory and rebranding it.
- For more stories go to www.BusinessInsider.co.za.
Mara Phones in South Africa, whose future became uncertain when its factory and equipment were placed on auction earlier this year, has just been acquired by a group of investors.A purchase agreement for the smartphone plant and its assets was concluded on 29 June. It saw Lebashe Investment Group (the owners of Arena Holdings), MPSA projects, and Mara Phones’ local management buyout team acquire it.“The deal sees Lebashe Investment Group taking up a significant shareholding in the business, which consists of a portfolio of smartphones, tablets, and other smart devices,” Mara Phones said in a statement.The company said it would focus on rebranding, marketing, and creating sustainable channels. It also committed to establishing a healthy working environment and protecting employees’ dignity.“The aim is to position Africa as a world-class manufacturing hub of hi-tech products and to locally manufacture affordable, high-quality mobile smart devices,” it said.The once government-backed entity, set up at Durban’s Dube trade port, went bust last year, just nine months after it began operating. Its launch in late 2019 was met with much fanfare, with President Cyril Ramaphosa lauding it for putting South Africa on the map and making it a leader in technology.Its creditors, the Industrial Development Corporation (IDC) and Standard Bank liquidated the entity and put it up for auction in February. It was subsequently placed under business rescue in the hope of saving the entity and preserving jobs.Total funding for the factory amounted to R429 million, with the IDC acting as the senior lender in the venture and approving total facilities worth R238 million. Despite Mara Phones’ CEO, Ashish Thakkar, pledging to inject R1.5 billion into the project, its shareholders could not raise their total contribution, and the shortfall had to be plugged by Standard Bank and the IDC.Following its downfall, Mara Phone’s local management team made a bid directly to the IDC to buy back the factory, leading to its creditors voting in their favour earlier last month. In March, CEO Sylvester Taku told Business Insider they had funding from investors lined up to help take over the business.
Meet the new owners of Mara Phones in South Africa
Slyvester TakuTaku, a chartered accountant with an MBA degree, is one out of two members of Mara Phone’s MBO team. He sat as the managing director of Mara’s local management team.Taku was a crucial figure in developing Mara’s strategy and led its execution. He has 20 years of experience in technology and media and has worked for Deloitte and Ernst and Young.Taku said it had been an arduous year working on the Mara Phones transaction.“We persisted even when it looked like failure was the only obvious outcome because we understand that it is more than a company we were trying to rescue but also the aspirations of many Africans who will like to see a thriving smart devices manufacturing industry in South Africa and the continent,” he said.Mabuti RadebeMabuti Radebe acted as co-lead in the buyout process. He is the founder of Virlolite, a firm specialising in distributing, franchising, and retailing telecoms-value added products like smartphones, tablets, laptops, Wi-Fi, fibre, data, and VoIP (voice over Internet Protocol).Virlolite also holds the master franchisor and distribution rights for Mara Phones South Africa.He has sat on various investment boards and has experience in project financing, deal structuring, project development, sales, and marketing. He has worked in a division of the United Nations, the Atomic Energy Agency.“We are committed to [being] an integral part of rebuilding in Durban and surrounding areas after the floods and the July unrest,” Radebe said.Lebashe Investment GroupLebashe Investment Group is a 100% black-owned investment holding company with assets in industries such as financial services, technology media, and telecommunications.The company also owns Arena Holdings (previously Tisoblackstar), which publishes the Sunday Times and Business Day newspapers, among other titles. It acquired the business in 2019. The investment group was founded by Tshepo Mahloele, Jabu Moleketi, and Warren Wheatley. Mahloele, with more than 20 years of experience in private equity, is chairman for both Lebashe and Arena. He’s held executive posts at the Development Bank of Southern Africa and the Commonwealth Development Corporation, among others. Jabu Moleketi, a university of London and Harvard Business School alumnus and a former deputy finance minister, also makes up Lebashe’s board of directors. He is the non-executive chairman of PPC, South Africa’s largest cement maker, and Harrith Fund Managers.Wheatley, a chartered accountant, is Lebashe’s chief investment officer and has post-graduate diplomas in corporate finance, financial planning law, and auditing. Wheatly serves as a non-executive director on Arena and chairs the Joint Investment Committee of Telkom’s retirement fund.