Thesis (MDF)--Stellenbosch University, 2011. / This study considers the impact that the particular funding structure used in the financing of black
economic empowerment (BEE) transactions has on the expected outcome. Various structures are
evaluated, each with their particular advantages and disadvantages.
The report details the history of South Africa, the Industrial Development Corporation (IDC), as well
as the black economic empowerment phenomenon. An in-depth commentary on the financing
structures used for BEE transactions within the IDC is presented together with a new, remodeled
structure to be used in the analysis as part of a comparative study to determine whether the
existing preferential Vanilla Special Purpose Vehicle (SPV) structure garners the most appropriate
result for the BEE entrepreneur.
The statistical study tests whether the Vanilla SPV structure, where the financier is reliant on
dividends for the repayment of their preference shares, is a better structure than the reworked SPV
structure, where the financier is reliant on free cash flow for repayment.
The results infer that access to free cash flow is preferred by both the financier, as well as the BEE
party, as vesting is higher and the bullet payment required to attain that vesting is significantly
lower.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/80486 |
| Date | 03 1900 |
| Creators | Gihwala, Kiran |
| Contributors | Volschenk, Jako, Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | xii, 58 p. : col. ill. |
| Rights | Stellenbosch University |
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