In an intriguing turn of events, previously bankrupt Mara Phones South Africa (Pty) Ltd. has recently been recapitalized by new investors in Lebashe Investment Group and MPSA projects.
On June 29, a sale agreement was signed to buy the smartphone's Durban plant and its assets. Lebashe Investment Group has purchased a sizable portion of the company, which has a portfolio of smartphones, tablets, and other smart gadgets. Among the shareholders of South Africa's first smartphone manufacturer is also the management buyout team (MBO) members Sylvester Taku and Mabuti Radebe.
"It has been a difficult year working on this transaction, but we persisted even when it seemed like failure was the only likely result. This is because we understand that it is not just a company we were trying to save but also the aspirations of many Africans who would like to see a thriving smart device manufacturing industry in South Africa and the continent. Lebashe Investment Group is the ideal partner we could have chosen to resurrect this company with”. Sylvester Taku is commenting on the purchase.
Made in Afrika
The inauguration of a Mara smartphone manufacturing unit in Rwanda in April 2019 was announced earlier in February 2019 by Paula Ingabire, Rwanda's Minister for Information and Communications Technology (ICT) and Innovation. Ashish J. Thakkar, the founder of Mara Group, reaffirmed this in 2019 at the launch of the South African manufacturing facility.
It's crucial to note that Mara wasn't the first company to produce smartphones in Afrika for the Afrikan market. There are numerous instances, with AfriOne in Nigeria being one of the more noteworthy ones. In 2017, AfriOne launched a mobile phone production facility in Lagos, Nigeria, with the capacity to produce 300,000 units each month.
The Investment Development Corporation (IDC) and Standard Bank provided R429 million in credit facilities as the company's initial finance to Mara Phones. As the project's senior lender, IDC authorized R238 million in total facilities.
Beyond the financing by the IDC and Standard Bank, the Mara Phones manufacturing plant received further support from South Africa's government. Mara Phones was granted an R100 million tax break by South Africa's government with a further promise that the government would give the smartphone manufacturer procurement preference when any government department bought Mara Phones smartphones until 2026.
Despite all this support and financing, unlike its counterpart in Rwanda which among others exports smartphones to Angola, the Mara Phones manufacturing plant in South Africa couldn't become a viable business and had to be liquidated, and all assets were auctioned on 28 February 2022.
Meet the new Owners
A 100% Black-owned investment holding firm, Lebashe Investment Group has holdings in the financial services, media, and telecommunications sectors. The business also owns Arena Holdings (formerly Tisoblackstar), which among other publications, publishes the Sunday Times and Business Day. It bought the company in 2019.
Tshepo Mahloele, Jabu Moleketi, and Warren Wheatley created the investing firm. Lebashe and Arena's chairman, Mahloele, has over 20 years of experience in private equity. He has held executive positions in several organizations, including the Commonwealth Development Corporation and the Development Bank of Southern Africa.