Effective B-BBEE transformation

One of the leading measures in South Africa’s broad-based black economic empowerment (B-BBEE) policy is that of company ownership – a measure that is often difficult to comply with, particularly in the case of small to medium size enterprises.

Rays of Hope has created the Masibambisane Empowerment Trust (ME Trust), a 100% broad-based black-owned B-BBEE Trust that can partner with a company as its black shareholder, offering a creative solution that benefits the company and the communities that Rays of Hope works with.

Rays of Hope is the Trust’s main beneficiary, and as Rays of Hope only works with Black South Africans in Alexandra township, all dividends paid to the trust through its shareholding will contribute to the work that is done in Alex by the organisation.

To become a shareholder in a company, the trust will acquire shares through donation or vendor financing. The number of shares acquired depends on the size of the company as well as the B- BBEE level that the company wants to achieve. For example, for smaller companies (under R10m), shareholding by a trust, such as the ME Trust, can result in them being a Level 2 company, which is a requirement for tendering for government work.

The creation of the ME Trust is already starting to bear fruit, with its first deal – a 51% share of a company called Spectill Masibambisane (Pty) Ltd – signed in early October! We are also in final discussions with two other companies who are using this creative way to achieve positive results for their own businesses and job creation projects, and by supporting Rays of Hope work in Alexandra.

Contact Tracey Peppler on tracey@raysofhope.co.za for information on how your business can get involved.