Cape Town – Economic Development Minister Ebrahim Patel says the Independent Development Corporation (IDC) has put together a multibillion rand business rescue package for firms that have been impacted by challenges such as drought.
The Minister said this when he tabled the department’s Budget Vote in the National Assembly on Thursday.
Minister Patel said the package, estimated at R20.7 billion, is aimed at assisting many companies that are faced with challenges of softening markets and slowing demand for their products.
He said the beneficiaries will be a combination of companies who are affected by the drought, falling mineral prices and softer global trading conditions.
“The IDC has put together a package where it will make available in the short term some R4.7 billion of funding for companies facing these conditions and in the medium term [over the next three years], an additional R8.9 billion amounting to some R13.6 billion over the next 36 months that will be available as facilities to support companies faced with the need to recapitalise and to strengthen their technologies…” said Minister Patel.
He said that in addition to the support to businesses, the IDC will work with clients that are affected by the softening of markets.
“In some cases, it would mean adding an additional period to the loan to give the companies an opportunity to manage their way out of challenging markets. And they estimate that the value of that restructuring is approximately R7.1 billion.”
Minister releases further detail for SAB Miller-AB InBev merger conditions
Last week, the Minister announced an agreed approach with AB InBev to the competition authorities on the aqcuisition of SAB Miller.
The Minister said AB InBev has committed R1 billion to a localisation effort for farmers and other suppliers of inputs.
“Last week, the company and government agreed on an approach to the competition authorities dealing with public interest issues,” he said.
The Minister said R610 million of this will be used to support the development of 800 new emerging farmers and 20 new commercial farmers to produce more local barley, hops, maize and malt, with the strategic intent to create at least 2 600 new jobs in agriculture.
“Secondly, we agreed the company would commit R200 million to enterprise development that includes setting up a business incubation facility, promoting innovations and supporting business coaching facilities to small businesses,” he said.
He also said AB InBev has committed R190 million to sustainability and education programmes that include the development of alternative energy sources for their company’s own operations, a commitment to reduce waste and encourage recycling and preserving water.
“We have parts of the country that are water scarce, not just during the drought period but in the long term. They have committed to youth programmes, to making scholarships available for engineering … students and to provide 200 additional learnerships,” he said.
“I think what is significant is the company wants to work with government to ensure that over a number of years, that we turn the country from a net importer of hops to a net exporter of hops and malt.” – SAnews.gov.za
