vcapital posted on September 05, 2011 17:06
TrenStar transaction displays Vantage Capital’s commitment
The TrenStar transaction displays Vantage Capital’s commitment to South Africa’s mid-market companies, Black Economic Empowerment, and increased exports
Vantage Capital | July 2011
TrenStar is a national returnable packaging group and is the largest provider of its kind in the automotive sector. The company provides services to most of South Africa’s automotive manufacturers, as well as to industries that include fruit juice production, blood service, oil, lubricants and gas. TrenStar is a technological leader in the logistics sector offering “track and trace,” RFID and barcode technology, all of which enables superior supply chain management and just-in-time inventory capabilities.
Expansion Capital for Mid-Market Company
In December 2010, Vantage Capital provided R85m in funding for TrenStar. The funding allowed for 100% of TrenStar’s shareholding to be acquired by management and a Black Economic Empowerment Partner. The BEE partner is the investment company of the African Women Chartered Accountants.
The availability of debt funding in South Africa has decreased since the financial downturn, and mid-market companies have struggled to obtain the funding they require for growth. Large banks have reduced their level of lending and Vantage Capital therefore plays an increasingly important role in providing funding for smaller businesses.
Vantage is providing TrenStar with R35m in expansion capital, allowing the company to make an increased investment in returnable packaging (metal and plastic containers). The containers will be used by Ford and Volkswagen’s South African operations to produce new automobile models starting in 2012.
Local Manufacturing and Exports
Production of the 2011 all-new Ford Ranger, which is mostly for export, will commence in South Africa this year. Ford announced in February 2008 that the Ford assembly plant, in Silverton, North of Pretoria South Africa, was selected as one of the assembling sites for the Ranger. It is one of three plants worldwide, along with Thailand and Argentina that will be assembling the new Ford Ranger.
Volkswagen approved production of the new Polo model, and has invested over R3 billion in infrastructure and equipment to support production. In manufacturing the new Polo model, Volkswagen South Africa will continue producing the product line which started in the country in 1996. Volkswagen makes a substantial number of right-hand drive Polos for export. Circa 75,000 Polos were exported in 2010, supporting the government’s plan for increased local production through the Automotive Production Development Programme.
Black Economic Empowerment
Vantage provided R10m of funding to support a 26% shareholding in TrenStar for a Black Economic Empowerment partner. The selected BEE partner is the investment company of the African Women Chartered Accountants. The company operates on behalf of 60 shareholders and 900 South African Women Chartered Accountants nationwide, and the group’s representative is Sindi Koyana.