R50m BEE investment for SunScape

Johannesburg, 29 Jul 2009

SunSpace has signed a R50 million deal with the National Empowerment Fund (NEF), to finance growth and development of the aerospace company.

The deal will see the NEF invest directly into the black economic empowerment (BEE) consortium that owns 25% of the company's equity. The funding, aimed at increasing capacity and growing the local aerospace market, forms part of the funding agency's goal of rapidly increasing black participation in strategic industries and enterprises.

The company lists its BEE partner as Dusty Moon Investment 315. Its shareholding consists mainly of private individuals, current employees, the Stellenbosch University Investment Trust and an Employee Share Ownership Programme Trust, which involves all the present employees of SunSpace.

NEF chief financial officer Andrew Wright notes the investment is in line with its mandate to support BEE initiatives and recognise the space market as a strategic sector. He notes the investment means the funding body is aligning itself with key initiatives, such as government's National Space Policy and the Department of Trade and Industry (DTI) space programme.

“SunSpace is poised on receiving and delivering upon key government contracts, adding to their existing specialist design, technical and manufacturing capacity. Plus SunSpace are training and developing black aeronautical engineers, contributing also to government's aim to develop skills and human resources. This really has materialised into a win-win result for broad-based BEE,” notes Wright.

'Real empowerment'

SunSpace operates from Stellenbosch and includes the team that designed the first locally-developed Sunsat satellite launched by Nasa in 1999. It also manufactured the low-earth-observation Sumbandila satellite in partnership with the University of Stellenbosch.

Nonfuneko Majaja, chief director of the DTI, notes the deal is an example of “real empowerment”. SunScape already has an active black empowerment ownership and management element, and the NEF says the funding allowed an opportunity to structure a more efficient capitalisation structure for the black shareholders.

Majaja adds the DTI recognises that empowerment is multi-faceted and has to be built on a range of initiatives focused on different objectives. The department is moving away from mainly financing black-owned small and medium enterprises, to supporting some of the country's largest and most innovative empowerment share schemes in strategic industries, she says.

“Space technology is no longer the exclusive preserve of the developed economies of the north. SA is taking up its rightful place in this and other advanced technology industries, and is proving to be an innovative and energetic player,” Majaja notes.