1974 – 1981 Randfontein Estates Gold Mining Company
I was initially employed in a clerical position working my way up through the various administrative departments and eventually placed in charge of the capital expenditure administration of new projects, both surface and underground including gold and uranium recovery plants
1982-1988 Sentrachem – Afprene Project in Newcastle
Developed to manufacture rubber from coal during the sanctions era.
As a result of the debt standstill of 1985, the predominantly foreign sourced project finance was redeemed out of domestic borrowings at very high rates of interest and then restructured through leverage leasing where tax base accumulated through the project investment and other allowances, was sold to eleven profitable SA groups who participated in three Lessor Trusts. As a consequence, the reinvestment of the inflow of diverted tax contributions to the trusts offset against the high domestic borrowing costs (which were deductible), resulted in an effective financing rate of 6%. Despite this mechanism to save the project, the project was eventually abandoned when the then Minister of Trade and Industry, Dawie De Villiers, withdraw import protection for natural rubber against which, the manufacture of rubber from coal could not compete.
I was responsible for the administration of the various lessor trusts.
1989-1992 Finansbank
I was employed in the project finance department at Finansbank.
The following projects were structured and arranged by me
- Tiger Oats Wheat and Maize Mill in Pietermaritzburg US$ 60m – This was a straight 100% debt package through Nedbank backed by Old Mutual and secured by a Corporate Guarantee from the Tiger Group. The foreign component imported from Buhler in Switzerland, was financed under an import credit arrangement with Credit Suisse of Zurich
- University of Cape Town Graduate School of Business US$ 12m – The old breakwater prison at the V&A was leased from Portnet under a 99 Year lease. At the time domestic interest rates were running at 17%. With the approval of the then Commissioner of Inland Revenue, Hannes Hattingh, a special purpose company was established under section 10(1)f of the income tax act where an ecclesiastical or tertiary education company could be established being fully exempt from tax. Having set this up, the SPC issued cumulative redeemable preference shares (an after tax funding instrument) to the Nedbank Group while simultaneously preselling MBA and other post graduate course to Corporates which it invested at the then domestic deposit rates of approximately 13%. The combined benefit of the preference share issue cost plus the income from interest on deposit resulted in an overall funding cost of about 9%., The next lowest offer for funding was the pension funds at 15%.
1992-1995 Investec
One of the founding members of the emerging market finance department.
The following projects were structured and arranged by me:
- Set up a revolving credit facility for Gecamines in Zaire against security over a pipeline of cobalt and copper being transported through South Africa to the Port of Durban. Anglovaal, provided a price hedge and buy-back guarantee in the event of a default. The value was US$ 5 – 10m revolving and was mainly for open cast mining spares and equipment plus extraction plant spares and chemicals. Political risk was covered by CGIC (now ECIC) as reinsured by the Department of Trade and industry
- Water Well Drilling Equipment for the Government of Zimbabwe during the drought of 1992 – US$ 8m. This was secured through CGIC Export Credit Support for 60% and Lloyds of London Contract Frustration Cover for 40%. The MOF signed ten promissory notes which were honoured over a five-year repayment period.
- Zambia Consolidated Copper Mines – Tailings Recovery Plant by Delkor Technic – US$ 10m. The project was fully funded against a ZCCM guarantee. Lloyds of London provided 90% political risk cover with CGIC covering 85% of the commercial risk.
- Advised on Kenya Railways – Lease of Transnet Diesel Electric Locomotives for the Mombasa Nairobi Railway. Repossession frustration cover provided by Lloyds of London. The Locomotive axles, were converted from 3’6” to 1 metre in South Africa before delivery by sea.
Triennex – Set up my own project advisory business in 1995 -2003
The following projects were structured and arranged by me using the balance sheet capacity of various banks.
- Congo Brazzavile – Sounda Hydro Electric Power Station – US$24m. The project was funded by Standard Bank and underwritten by CGIC. The project scope involved Sulzer 30MW low gravity high volume turbines. Power was to be sold to Agip and Elf the French Oil producers in that country. The project was interrupted during construction by the civil war between the new president Pascal Lissouba and old President Sassou Nguesso. After the intervention of the Angolan Air Force, the old President resumed his Presidency. Unfortunately, the project site and equipment was attacked with considerable loss of life and equipment damage.
- Kasese cobalt tailings recovery project in Uganda – US$ 70m. The project was executed by Batemans with financing provided by Standard Bank of South Africa. The Standard Bank portion was US$ 25m with funding supplied by a consortium which included Proparco, ERBD and others. Guarantees were provided by CGIC for the RSA portion. For a while security was under the auspices of Executive Outcomes.
- Point Noire Habour Dredging in Congo. – US$ 18m. Royal Boskalis the Dutch Dredging company, undertook the work with Jeffares and Green as Consulting Engineers. Funding was provided by Rand Merchant Bank against Lloyds of London contract Frustration Cover
- Residential housing estate development in Libreville – US$ 12m. Grinaker did the construction work and guaranteed performance of the Israeli designed modular system. The project was funded by Nedbank
- Two way radio communication system for the Tanzanian Army – US$ 12m. Supplied by Grintek and financed by Standard Bank against Lloyds of London contract frustration cover.
- Telecommunication system upgrade for the Congolese Government in Brazzaville – US$ 15m. financed by Rand Merchant Bank and covered by Lloyds of London.
- Buhemba Open cast gold mining operation in Tanzania including a gold buying office to cater for artisanal miners. The project was financed over phases by Nedbank up to US$ 75m using Lloyds of London and Hannover re insurance cover. In 2001, following 9/11, Deutsche Bank who had approved a US$ 35 m loan to complete the Buhemba expansion, withdrew funding as a result of the losses suffered by AIG who had, up until then, provided coverage for their portion of the project. Nedbank as a result of Deutsche Bank’s actions found itself without a co-financer, restructured and then abandoned the project.
As a result of a serious illness in 2000 and 2001 and Nedbank’s actions with the Tanzanian project, I was forced to close Triennex in 2003.
2004 – Present day – Consultant and advisor
- Security Surveillance System for the city of Libreville – two phases US$ 40m. Funded by Credit Suisse and the Industrial Development Company of South Africa against Lloyds of London cover. Supplier of equipment – Omega Risk Solutions Pretoria.
- Advised on VPN African Network for various corporates such as LaFarge and BP before the internet was widely placed.
- Advised Thyssen Krupp (Pune) India on the revitalisation of the 20 000 Ha sugar plantations near Kisumu on Lake Victoria including the establishment of a new 100 000 tpa sugar mill at Miwani. A full bankable study was completed inclusive of full EIA and was shown to be feasible. The project was frustrated through political self -interest which forced me to recuse myself. It remains undeveloped.
- Advised on a structure in Nigeria for petroleum product importation using offshore anchored mixed product tankers supplied by Ocean Tankers in Singapore. Also involved ship to ship lightering as tankers are too large for Nigerian product terminals.
- For five years, I have worked on the development of a floating power plant company which will own and operate 70m x 30 m barges each with two Siemens AGT 65 (Rolls Royce Trent) Gas Turbines in aero derivative variant driving Brush generators to produce 132 MW of electricity using natural gas as feedstock or liquid natural gas as necessary. This is now know as Gigajoule Floating Solutions.
