Date: 29/07/2003
Source: North West Provincial Government
Title: Vilakazi: Restructuring of North West bus operations
RESTRUCTURING OF THE NORTH WEST TRANSPORT INVESTMENT (PTY) LTD WITH SPECIAL REFERENCE TO THE NORTHWEST STAR (PTY) LTD BUS PASSENGER OPERATIONS: MEDIA STATEMENT BY THE NORTH WEST MEC FOR TRANSPORT, MR PHENYE VILAKAZI, Pretoria, 29 July 2003
A very warm welcome to you members of the media and thank you very much for attending the conference. Allow me to give you a brief background on the restructuring of the North West Transport Investment.
1. Background information
The main strategic objectives of the NTI restructuring are:
* Transfer operating risk from the state to the private sector
* Raise sufficient funds to settle pre-judicial management debt
* Ensure participation of previously disadvantaged individuals.
The Northwest Transport Investments (NTI) has been under judicial management since 1999. Various options on how best NTI can be run were explored and finally a public-private partnership was adopted as the best and it led to the appointment of transactional advisors. Following an option analysis, a managed work out option was recommended and adopted to sell Northwest Star (Pty) Ltd (a subsidiary of NTI) as a going concern. The future of the two other NTI subsidiaries, Botlhaba and Batswanagare, which are operating between North West and Gauteng, will be decided after negotiations between Transport MECs of the two provinces and the subsequent approval of the national Minister of Transport.
Following a decision by the North West Provincial Government and the approval of the feasibility and the business plan as approved by the national Minister, a press announcement was published from 6 April 2003. These national and regional media announcements were inviting prospective strategic investors to express interest in acquiring an interest of 85% in the Northwest Star operations as follows:
* Thari Bus Services
* Tlhabane Bus Services
* Far West Bus Services
Thirty (30) prospective strategic investors collected Request for Pre-Qualification documents, and twenty pre-qualificationbids were received. To date we have completed the evaluation and have short listed ten (10) companies/ consortiums.
2. Brief profile of the Northwest Star bus operations
The company has 3000 employees and operates in access of 1000 busses with a combine turn over of R750 million per annum.
3. The criteria used to evaluate potential strategic partners
The Evaluation Committee consists of officials from the North West Provincial Government and Judicial Management of the Northwest Transport Investment. The Transaction Advisers Consortium comprises PricewaterhouseCoopers, Kwezi Advisory Services and Cliff Decker provides technical assistance to the entire process. The applicable criteria for qualification are:
* Experience in management of commuter transport operations
* Financial standing of the bidding companies/consortiums
* Minimum previous disadvantaged individuals' participation, PDI, as determined by the National Land Transport Transition Act
* More than fifty (50) percent of ownership of the company should be in the hands of historically disadvantaged individuals (PDIs) by the effective date of transfer
* Special provincial requirement that in evaluating PDI participation, extra credit must be given the following:
- Extend the participation of local PDIs (North West based)
- Extend of PDI's participation in the proposed operations (directorship, executive role etc)
4. Companies/Consortiums who met the pre-qualification requirements
Following companies/consortiums met the pre-qualification requirements and have now been short-listed to proceed to the next phase of the transaction process:
* Goroga Bus Service
* Maatlametlo (Pty) Ltd
* Northwest Transport Enterprises
* Putha-Lekoko Transport Consortium
* Tans-Africa Holdings
* Unitrans Passengers and Mvelaphanda Holdings
* Valuader Transport Holdings
* Washedha Bus Company
* Sediba Transport Service
* Atamelang Transport Services.
5. The future of Northwest Star (Pty) Ltd employees
Unique and important aspects of this restructuring process are as follows:
* The architecture of this transaction has ensured almost 100% retention of employees through the sale of operations as a going concern
* Employees would be afforded a 15% equity stake in the company
6. The future of Northwest Star (Pty) Ltd managers
As it is the case in other restructuring processes, regrettably we are not able to guarantee jobs of managerial level staff.
For more information please call James Moche at 082 802 0585
Issued by North West Provincial Government
29 July 2003
Source: North West Provincial Government
Title: Vilakazi: Restructuring of North West bus operations
RESTRUCTURING OF THE NORTH WEST TRANSPORT INVESTMENT (PTY) LTD WITH SPECIAL REFERENCE TO THE NORTHWEST STAR (PTY) LTD BUS PASSENGER OPERATIONS: MEDIA STATEMENT BY THE NORTH WEST MEC FOR TRANSPORT, MR PHENYE VILAKAZI, Pretoria, 29 July 2003
A very warm welcome to you members of the media and thank you very much for attending the conference. Allow me to give you a brief background on the restructuring of the North West Transport Investment.
1. Background information
The main strategic objectives of the NTI restructuring are:
* Transfer operating risk from the state to the private sector
* Raise sufficient funds to settle pre-judicial management debt
* Ensure participation of previously disadvantaged individuals.
The Northwest Transport Investments (NTI) has been under judicial management since 1999. Various options on how best NTI can be run were explored and finally a public-private partnership was adopted as the best and it led to the appointment of transactional advisors. Following an option analysis, a managed work out option was recommended and adopted to sell Northwest Star (Pty) Ltd (a subsidiary of NTI) as a going concern. The future of the two other NTI subsidiaries, Botlhaba and Batswanagare, which are operating between North West and Gauteng, will be decided after negotiations between Transport MECs of the two provinces and the subsequent approval of the national Minister of Transport.
Following a decision by the North West Provincial Government and the approval of the feasibility and the business plan as approved by the national Minister, a press announcement was published from 6 April 2003. These national and regional media announcements were inviting prospective strategic investors to express interest in acquiring an interest of 85% in the Northwest Star operations as follows:
* Thari Bus Services
* Tlhabane Bus Services
* Far West Bus Services
Thirty (30) prospective strategic investors collected Request for Pre-Qualification documents, and twenty pre-qualificationbids were received. To date we have completed the evaluation and have short listed ten (10) companies/ consortiums.
2. Brief profile of the Northwest Star bus operations
The company has 3000 employees and operates in access of 1000 busses with a combine turn over of R750 million per annum.
3. The criteria used to evaluate potential strategic partners
The Evaluation Committee consists of officials from the North West Provincial Government and Judicial Management of the Northwest Transport Investment. The Transaction Advisers Consortium comprises PricewaterhouseCoopers, Kwezi Advisory Services and Cliff Decker provides technical assistance to the entire process. The applicable criteria for qualification are:
* Experience in management of commuter transport operations
* Financial standing of the bidding companies/consortiums
* Minimum previous disadvantaged individuals' participation, PDI, as determined by the National Land Transport Transition Act
* More than fifty (50) percent of ownership of the company should be in the hands of historically disadvantaged individuals (PDIs) by the effective date of transfer
* Special provincial requirement that in evaluating PDI participation, extra credit must be given the following:
- Extend the participation of local PDIs (North West based)
- Extend of PDI's participation in the proposed operations (directorship, executive role etc)
4. Companies/Consortiums who met the pre-qualification requirements
Following companies/consortiums met the pre-qualification requirements and have now been short-listed to proceed to the next phase of the transaction process:
* Goroga Bus Service
* Maatlametlo (Pty) Ltd
* Northwest Transport Enterprises
* Putha-Lekoko Transport Consortium
* Tans-Africa Holdings
* Unitrans Passengers and Mvelaphanda Holdings
* Valuader Transport Holdings
* Washedha Bus Company
* Sediba Transport Service
* Atamelang Transport Services.
5. The future of Northwest Star (Pty) Ltd employees
Unique and important aspects of this restructuring process are as follows:
* The architecture of this transaction has ensured almost 100% retention of employees through the sale of operations as a going concern
* Employees would be afforded a 15% equity stake in the company
6. The future of Northwest Star (Pty) Ltd managers
As it is the case in other restructuring processes, regrettably we are not able to guarantee jobs of managerial level staff.
For more information please call James Moche at 082 802 0585
Issued by North West Provincial Government
29 July 2003
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