Kunene Bros Holdings (KBH)
"Empowerment through active ownership"
Kunene Bros. Holdings (Proprietary) Limited (KBH) was incorporated
on 21 July 1994 as an "active ownership" business with diversified
interests. All five brothers have joined the full time employment of
the company as active owners enabling KBH to provide a range of well
defined services to group companies.
On 28 August 1994 Kunene Finance Company (KFC) was established for
the purpose of raising medium to long term finance to fund the Group's
investment program. KBH owns 87% of KFC.
KFC is a diversified holding company and currently has four major areas
of investment interests
- Coca-Cola Bottling and Distribution
- Defence, Security and Projection Systems.
- Financial Services
- Motor Dealerships
The companies in the group are:
- Grintek Ewation (Pty) Ltd Defence, Security and Projection Systems
- Coca-Cola Fortune, the second largest bottling and distribution
company in South Africa
- Glenrand MIB (listed specialist financial services company)
- McCarthy Kunene Motors ( authorised dealer for Daimler Chrysler
)
KBH's active ownership program is exercised through secondment contracts
under which KBH executives are seconded to the Group's subsidiaries
and associates in positions of influence which include membership on
boards of directors, operating boards, executive committees, audit committees
and remuneration committees. In addition KBH secondees provide group
companies with value added input on:
- Transformation and empowerment
- Capacity building
- Communication
- Corporate governance
- Corporate finance
- Networking and information
- Social responsibility
- Employment equity
- KBH to be the driving force behind the development of its investments.
- Concrete and specific demands are placed on the boards of group
companies and their competence and power to act
- The difference between owner interests and executive interests
are recognised and managed
- To be comfortable with the business plans and the time frame for
execution thereof
- To promote constructive dialogue between owners/board members/executive
management
- To measure performance and growth of the value of underlying investments
- Recognition of the boards most important task as being the appointment
and retention of the best executive leadership through the application
of well functioning principles of corporate governance and analysis
together with the ability to force through decisions which focus
on long- term value creation
KBH's active ownership is demonstrated through executive roles on the
boards on investee companies e.g. Zanosi Kunene (Chairman
- Coca-Cola Fortune, Coca-Cola Canners (SA) (Pty) Ltd), Zoli Kunene ( Chairman - Grintek Ewation), Dudu
Kunene ( Chairman - Glenrand MIB and Chairman - McCarthy Kunene
Motor Holdings).
Through its unique active ownership model, KBH is recognised as one
of the most successful black empowerment companies in South Africa.
History
In 1978 Keith Kunene secured a sub-lease for Mr. Fortune Kunene senior
to operate a fresh milk outlet in Vosloorus. The business underwent
drastic changes when in 1983 the Kunene Brothers won a tender to take
over a liquor outlet that was previously owned by the government in
the same township. In addition, the milk outlet started selling Coca-Cola
products on a wholesale basis. Three of the five brothers, Zanosi, Zoli
and Menzi joined the business on a full time basis.
The Coca-Cola leg of the business grew rapidly between 1983 and 1987,culminating
in the establishment of three Coca-Cola wholesale outlets (Vosloorus,
Kwa-Thema and Kathlehong). During this time the brothers also established
three liquor store outlets.
By 1991 the business was appointed the official distributor of Coca-Cola
brands by Nigel Bottling Industries and in its first year as a distributor,
the business sold and distributed approximately
670 000 cases of Coca-Cola products.
Prior to Coca-Cola's return to South Africa in October 1994, the Kunene
Brothers were the largest independent distributors of Coca-Cola in this
country. This status positioned them to successfully negotiate in September
1994 the acquisition of an initial 51% interest in Coca-Cola Bottling
Mpumalanga (Pty) Ltd (CCBM) from Coca-Cola. CCBM holds the Coca-Cola
bottling and distribution franchise in the major areas of Mpumalanga
Province.
The acquisition of CCBM enabled the brothers to formalise their business
interests through Kunene Bros. Holdings and provided the platform for
its future developments.
At the outset, Zanosi was appointed to the management staff of CCBM.
In October 1994 he attended a three-month course at the Coca-Cola College
in the USA. Less than a year later, in August 1995, Zanosi was appointed
the Managing Director of CCBM. On 28 December 1995 Coca-Cola disposed
of its remaining 13% interest in CCBM to the Kunene Brothers, increasing
their share to 64%.
Vision
"To create sustainable wealth through partnerships in business
by applying a strategic and participative approach to the Group's investment
portfolio."
"Sustainable wealth" implies creating high growth businesses
and conservative long term funding structures.
"Partnerships in business" includes funding partners as well
as operating partners.
"Strategic approach" implies a position to influence and
add value to investments with strong partners.
"Participative approach" will assist the Group in monitoring
the performance of its investments as well as maintaining communication
within the group.
To achieve the Group's vision, Kunene Bros. has and will continue to
position itself as one of South Africa's most successful groups.
Investment Criteria
The Kunene group's investments are predominantly held through Kunene Finance
Company (KFC). KFC is an unlisted investment holding company, focussing
on its core investments and applying the following investment criteria:
- The businesses must all be well established or have a strong franchise
and have strong management
- KBH must be in a position to apply its active ownership policy by
making a meaningful contribution to the development and promotion
of the business, particularly in matters affecting:
- policies and practices
- building capacity within the business
- investor relations
- business plans
- financial structure
- senior management appointments
- major investments/divestments
- corporate restructuring
- new share issues
- joint venture partnership
- The investment structure must provide KFC with the opportunity to
increase investments over time
- The investments must be made with financially strong partners
- The investments should not cause KBH to materially increase its
head office infrastructure
- The company and/or its underlying investments may be listed in the
future if deemed appropriate
Investment Activity
KBH was formerly established in August 1994 along with Kunene Finance
Company (Pty) Ltd. ("KFC") and Fortune Investment Holdings
(Pty) Ltd. ("FIH"). Prior to 1994 the Kunene brothers operated
one of the largest wholesale distributors in the Vosloorus, Katlehong
and Kwa Thema areas of the East Rand.
In September 1994 KBH acquired a 51% interest in Coca Cola Bottling
Mpumalanga (Pty) Ltd. ("CCBM") from Coca-Cola Southern Africa
Ltd. ("CC(SA)").
In August 1995 KBH acquired a 10% interest in Grintek Electronics
Ltd. ("GEL").
In December 1995 KBH acquired a further 13% interest in CCBM increasing
its stakes to 64%.
In April 1997 KBH completed its first equity placement through "KFC".
The institutional shareholders who acquired a 30 % interest in KFC,
are - Old Mutual, Sanlam, Nedcor investment Bank and Future Growth.
In May 1997 KBH increased its interest in GEL to 30%.
In June 1997 KBH acquired a 30% interest in Kunene McCarthy Motor
Holdings, a successful Mercedes Benz dealership in Witbank, Mpumalanga.
In November 1997 KBH acquired an 8% interest in Kilamanjaro, which
was a listed bottler operating a Coca-Cola franchise in East London.
In December 1997 KBH acquired a 35% interest in the listed holdings
company Grinaker Holdings Limited ("Grintek"), which in
turn owned 70% of GEL and 57% of Siltek Limited ("Siltek").
In May 1998 KBH organised the unbundling of Siltek from GEL which
resulted in a separate listing of GEL under Grintek. It also had the
effect of reducing KTL's controlling position over Siltek from 57%
to 27%. At the same time KBH's 30% interest in GEL was converted into
a 27% interest in the listed company, Grintek.
In June 1998 KBH acquired a further 20% interest in Kilimanjaro thereby
increasing its stake to 28%. In August 1998 the board of directors
of Kilimanjaro was re-constituted under the control of KBH.
In December 1998 KBH organised and completed its second capital fund
raising by way of a rights offer through which the institutional shareholders
of KFC increased their interest from 30% to 42%.
On 8 January 1999 KBH organised the acquisition by Kilimanjaro of
CCBM thereby obtaining a listing for CCBM. At the same time control
of Kilimanjaro was consolidated under KBH. The name Kilimanjaro was
changed to Fortune Beverages Limited ("FBL").
In September 1999 KBH completed its third raising of equity capital
through the sale of a 30% interest in Fortune Investment Holdings
(Pty) Ltd ("FIH").
In December 1999 KBH completed its fourth capital fund raising through
an underwritten rights issue in KFC.
In February 2000 KBH bought out Rand Merchant Bank's minority shareholding
in FIH and in July 2000 acquired the balance of Rand Merchant Banks
minority shareholding in Grintek.
In August 2000 KBH organised the disposal of its 27% interest in
Grintek to KTL thereby increasing its stake in KTL from 35% to 63%
and KTL's interest in Grintek from 48% to 58%. At the same time Siltek
was unbundled out of KTL.
In September 2000 KBH established the Kunene Investment Trust through
which it acquired a 10% equity option in Glenrand M.I.B.
In January 2002 KBH bought Amalgamated Beverage Limited's minority
share in FIH.
Effective March 2002, FBL merged with the South African bottling
operations of Coca-Cola SABCO, with FBL owning 19,5% of the merged
company named Coca-Cola Fortune ("CCF"), the second largest
Coca-Cola bottler in South Africa.
In May 2002, KTL unbundled its shareholding in Grintek Limited and
subsequently KTL was delisted on the JSE.
In May 2002, KBH exercised its option to acquire 10% of the equity
of Glenrand MIB.
In August 2002, FBL was delisted on the JSE.
In April 2003, KBH aquired a 40% interest in Action Ford, a successful
Ford and Mazda dealership located in Roodepoort and Krugersdorp.
In March 2004, KBH aquired a direct interest of 6% in CCF.
In July 2004, KFC acquired the minority shareholding in FBL whereafter
FBL was unbundled, enabling KFC to retain a direct holding of 13 ,4%
in CCF.
In May 2005 Saab AB of Sweden acquired all the shares in Grintek Ltd other than those shares held by KBH. Following the acquisition Grintek’s shares were delisted from the JSE and the name of the company was changed to Saab Grintek.
In June 2007 KHB increased its shareholding in Kunene Motor Holdings from 40% to 49% thereby creating an effective 50/50 partnership in the Mercedes Benz dealership with the McCarthy Group.
In September 2007 Saab Grintek unbundled its 55% shareholding in Grintek Ewation to its shareholders resulting in KBH holding a direct interest of 12.65% in Grintek Ewation.
In October 2007 KBH sold its 23% shareholding in Saab Grintek to Saab AB. The sale was in terms of KBH’s original shareholders’ agreement with Saab which was entered into at the time the company was delisted.
In November 2007 KFC completed a share buy-back under which it acquired shares owned by a number of financial institutions who owned in total shares representing 7% of KFC’s issued share capital. As a consequence of the share buy-back KBH’s shareholding in KFC increased to 45.5%. Per a voting pool agreement this shareholding increased to 51%.
In February 2010 KFC completed a further buy-back under which it aquired all the remaining shares owned by the financial institutions thereby increasing KBH's shareholding in
KFC to 87%.
Organogram
KS (Keith) Kunene
BA, B Proc
Keith is the Past Chairman of Kunene Bros. Holdings, Kunene Technology
Limited, Kunene Finance Company (Pty) Ltd and Fortune Beverages Limited.
Keith is an attorney of the Supreme Court of South Africa. He was the
founding partner of the legal practice Kunene Inc. He became an executive
Director of Kunene Bros. Holdings in January 1998 when he joined the
group on a full time basis.
His past and present community and professional involvement includes:
Chairman of the Vosloorus Centre for the Disabled
(1984-1986)
Chairman of the National Soccer League ( 1991-1992)
Executive member of the Black Lawyers Association (past Chairman)
Past Chairman of the Mpumalanga Gaming Board
Past Chairman of the Council of the University of Zululand
Past Chairman of the Central Energy Fund
Past Non-executive directorships
Aveng Ltd.
McCarthy Retail. Ltd.
Southern Bank of Africa Ltd.
Glenrand - MIB Ltd.
National Employment Trust
Fortune Beverages Ltd
National Exhibition Centre
In the January 1997 issue of Ebony SA, Keith was voted as one of South
Africa's 50 most influential black people.
MF (Dudu) Kunene
- BSc (Hons) Chemistry (Fort Hare),
MB BCh (Wits), DA (SA)
Dudu is the Chairman of Kunene Finance Company as well as Kunene Motor
Holdings Limited and Glenrand M.I.B. Limited. He practised as an anaesthetist
until January 1998 whereafter he joined the Group on a full time basis.
MW (Zanosi) Kunene
Zanosi is the Executive Chairman of Coca-Cola Fortune (Pty) Ltd and Coca-Cola Canners (SA) (Pty) Ltd. He
has had extensive training at the Coca-Cola headquarters in Atlanta
on the management of Coca-Cola operations. He is a former vice president
of the Ukhamba Liquor Association of South Africa and is a member of
the Coca-Cola leadership forum.
NRZ (Zoli) Kunene
Zoli is the Chairman of Grintek
Ewation (Pty) Ltd. He is also a Director of Denel and Cell C. Between 1980 and 1984, Zoli was the legal unit co-ordinator
for the Council of Unions of SA (CUSA), the forerunner of COSATU. His
community and professional involvement includes:
Past Chairman of the South African Aerospace Maritime and Defence Industries
Association (AMD)
Past President of the Defence Industries Interest Group of SA (DIIGSA)
Zoli is also an Honoury Colonel in the SANDF.
MB (Menzi) Kunene
Menzi is an Executive Director of Kunene Bros. With his extensive distribution
and trading experience, he is inter alia responsible for developing
the Group's motor franchise interests and is Chairman of Action Ford.
GJ (Graham) Royston
B Com, CA (SA)
Graham is the Financial Director of Kunene Bros. Holdings. Graham began
his career in a head office accounting position with Barlow Rand in
London. He thereafter spent seven years specialising in corporate finance
with UAL Merchant Bank in Johannesburg and Hill Samuel in London. In
1988 he joined Ernst & Young's Corporate Finance Consulting unit,
became a partner in 1990 and was appointed Supervisory Partner for Corporate
Finance in 1993. In October 1994 Graham joined the Kunene family in
order to develop their group interests.
JJ (Cobus) Niemand
BCompt (Unisa) CFA (SA)
After starting his career in accountancy and taxation in the early
1970's, Cobus was involved, inter-alia, in assisting and developing
businesses in the disadvantaged communities, during which period his
association with the Kunene family began. He joined the Kunene family
during 1996 as financial manager of the distribution business and during
1999 was appointed Group Financial Manager at the head office of KBH.
