13 March 2002
The Government of South Africa is pleased to announce that Zama Resources Limited (Zama) has been confirmed as the Final Preferred Bidder for the Limpompo and Mpumalanga commercial forest assets of the South African Forestry Company Limited (SAFCOL).
The forestry assets are currently held within a Special Purpose Vehicle, which is a wholly owned subsidiary of SAFCOL. This vehicle is Komatiland Forests (Proprietary) Limited (Komatiland). Zama will hold a 75% interest in Komatiland with the remaining 25% held by Government, communities and employees.
The bid price from Zama for the Komatiland forestry assets is R335m and this transaction marks an important milestone in the completion of the restructuring of forestry assets by Government.
Government, after careful selection process which took into account numerous factors arrived at the conclusion that Zama's bid was preferable.
The selection criteria used in the evaluation of the bids were the price, downstream investment, creation of opportunities for the communities resident in the areas where the forestry industry assets are located, future management of competition in the forestry industry and active empowerment to the previously disadvantaged individuals
Zama is a wholly black owned company led by black forest industry participants, such as sawmill owners and foresters, and with strong commitment to rural development through the inclusion of shareholder of numerous entities, which represent under-developed areas.
Given the historic nature of this transaction, it will ensure the meaningful participation of empowerment participants in all levels of the forestry industry and make an indelible mark in the indeginisation of this important industry.
Final negotiations and documentation in respect of the sale and transfer of the forestry assets will commence immediately with Zama. It is anticipated that the forestry assets will be transferred to Zama prior to June 30, 2002.
The process to reach this stage in the restructuring of the SAFCOL commercial forestry assets in the Limpompo and Mpumalanga has been lengthy but Government is happy to announce that the bid made by the Preferred Bidder, meets the sale objectives and policies of Government.
The current process commenced in March 2001, when the Information Memorandum was made available to the three previously announced bidders, being Zama, Paharpur Cooling Towers Limited and Renewable Resources LLC.
All of the above bidders submitted binding bids on September 14, 2001 after carrying out the necessary due diligence of the forestry assets.
A Bid Evaluation Committee (BEC) consisting of representatives from the Departments of Public Enterprises, National Treasury, Water Affairs and Forestry and SAFCOL has been involved in the process necessary to make a recommendation to Government from mid September 2001 through to mid February 2002.
The BEC through ongoing negotiations and discussions with the bidders has been able to make a recommendation to Government in a manner, which has been open and transparent.
I wish to take this opportunity to thank the Bid Evaluation Committee for their relentless effort in executing this complex transaction with professionalism and dedication.
Contact Persons: Mr Andile Nkuhlu
Chief Director: Restructuring
083 675 8277
Ms Pumla Mtyeku
Director: Communication
082 903 2423