Johannesburg, 05 Oct 2006
Sun Microsystems is considering selling 30% of its local concern to black investors, a decision that is expected to be considered at board level in the next two months.
Director for sub-Saharan Africa Vito Bonafede says following a visit to the country by Crawford Beveridge, its VP for Europe, the company is taking local empowerment seriously at international level.
Beveridge reports to CEO Jonathan Schwartz and is expected to take the proposal of equity ownership to board level. He adds that only the board can give permission for sale of equity.
While Sun Europe and SA have considered the proposal before, this is the closest it has moved towards being considered at top group level. Now, however, Bonafede is hopeful of feedback by the end of November, although he cannot predict the board's timelines.
SA, which makes up about 1% of the global company's revenue, could be a vital component of the firm's future as Bonafede expects the continent to continue growing at 20% a year.
He says while the US accounts for 47% of revenue, this landscape will change in "time to come", and getting black economic empowerment right locally first off is important.
With the current business landscape and SA's infamous past, businesses ignore equity empowerment at their peril, he notes. "We must find the right solution to satisfy not only the people of SA, but also the government."
However, Sun's relationship with its channel partners means this process is not as cut and dried as with other IT multinationals. Bonafede says the company cannot afford to alienate its channel partners, so must find a solution that satisfies government, the impending charter and its partners.
He says he has been working on revolutionising the company's empowerment credentials for the past two-and-a-half years and - having got other factors such as employment equity and procurement in place - turned his attention to equity ownership about nine months ago.
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