WIPHOLD consortium

Sphere Holdings (Proprietary) Limited

Key Features of Sphere
Profile of Key Executives
Operating Structure and Business Model
Ownership Structure
Contact Details

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1. Key Features of Sphere

• Strong management team backed by highly qualified non-executive directors
  Sphere is a new generation empowerment company with a highly qualified executive and non-executive team. The Sphere team comprises experienced individuals with a proven track record in private equity, investment banking and corporate law and asset management. This team has the expertise required to identify attractive investment opportunities, design and implement appropriate transaction structures and to add value to the underlying investments.
  
• Excellent relationships with Government and other key stakeholders in the South African economy
  The Sphere team has established an unrivalled and powerful network that covers Government, state-owned enterprises and key corporates in South Africa. This network, has enabled Sphere to develop a comprehensive insight into Government and senior corporate leaders’ thinking regarding broad based empowerment and will enable the Company to position itself as a preferred partner to both Government and key corporates in implementing broad based empowerment initiatives
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• Unique strategic equity partner model designed to create value for Sphere’s shareholders and investee companies
  Sphere intends to leverage the experience and skills of its shareholders, management and its well established network to operate as a strategic equity partner that will add significant value to its investee companies by actively participating in the strategic management of these companies. In addition to providing strategic input at board level, the Company intends to partner its investee companies in their transformation process by appointing black professionals with the relevant, specialist skills to executive positions at its investee companies and also advising these companies on organisational transformation strategies including human resources and procurement strategies. These initiatives will result in improved revenue generating prospects and hence improved profitability for the investee companies.
  
• Ownership structure
  Sphere’s ownership structure promotes broad based empowerment whilst incentivising founder shareholders and management.
  
• Strategic alliance with Nedbank and Rand Merchant Bank (“RMB”)
  Sphere has formed a strategic partnership with Nedbank Limited (“Nedbank”), which allows Nedbank to participate as a minority equity investor whilst providing Sphere with working capital and access to capital for viable, commercial transactions. In addition, as part of the acquisition of a stake in Ethos Private Equity, Sphere introduced RMB as a strategic minority shareholder alongside Nedbank, which improves the capital raising capacity of Sphere.

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2. Profile of Key Executives

Sphere’s directors and management consist of highly qualified and experienced individuals:

Itumeleng Kgaboesele - Chief Executive Officer (“CEO”). Itumeleng is the CEO and one of the Founder Shareholders of Sphere. He has overall responsibility for the company’s strategic, operating and investment activities.

Itumeleng has 7 years of investment banking experience gained in London and Johannesburg. Prior to joining Sphere, he was a Vice President in the Investment Banking Division at Citigroup. Prior to joining Citigroup, he worked at Merrill Lynch and Deutsche Bank. As an investment banker, he has advised the South African Government and numerous South African and international companies on Mergers & Acquisitions and on capital raising projects.

Itumeleng is also a member of the Investment Committee of the National Empowerment Fund Ventures Fund (a venture capital fund established by the NEF and the Industrial Development Corporation).

He graduated from the University of Cape Town with a Bachelor of Commerce and a Post Graduate Diploma in Accounting. Itumeleng completed his articles of clerkship with PriceWaterhouseCoopers and is a Chartered Accountant. Itumeleng is a non-executive director of Ethos (Pty) Ltd.

Pulane Tshabalala Kingston - Executive Director. Pulane is an Executive Director and one of the Founder Shareholders of Sphere. She has primary responsibility for deal origination and marketing within Sphere. She is also the Company Secretary.

She was previously an associate at White & Case (Johannesburg) and prior to that an associate partner at Edward Nathan & Friedland Inc (Johannesburg), specialising in corporate and commercial law.

Pulane has 7 years experience as a commercial lawyer. She has extensive experience in privatisations, listings and restructurings and has advised both private and public sector clients in determining the framework for long-term partnerships. Pulane was involved in the structuring and design of the first phase of empowerment-related transactions and employee share ownership schemes, such as Women Investment Portfolio Holdings, Nozala, Kensani and Real Africa Durolink. Pulane serves on the Boards of Ethos, Babcock Ntuthuko (Pty) Ltd, Business Arts South Africa and Nurturing Orphans of AIDS for Humanity (“NOAH”).

Pulane graduated from the University of Wales with an LLB (Hons) and from the University of Nottingham with an LLM in International Law.

Aadil Carim – Executive Director. Aadil is an Executive Director and shareholder in Sphere. Aadil has primary responsibility for the firm’s private equity strategy and investment activities. Aadil is also the Chief Financial Officer.

Aadil has 7 years experience in project finance and private equity. He was at AMB Private Equity Partners prior to joining Sphere. Prior to AMB, he spent almost 4 years at Ethos Private Equity where he gained exposure to the full spectrum of private equity activities, including fundraising, investing, managing portfolio companies and exiting investments. He gained exposure to project finance whilst at the Industrial Development Corporation, from where he moved to Ethos.

Aadil has significant experience in managing private equity and empowerment investments and has served on the board of directors of Nozala Investments (Pty) Ltd, Siphumelele Investment Limited, Tsebo Outsourcing Group (Pty) Ltd and Credcor Limited, amongst others. Aadil currently serves on the board of Babcock Ntuthuko (Pty) Ltd.

Aadil graduated from the University of the Witwatersrand with a B.Comm and B.Acc. He served his articles of clerkship with KPMG and is a Chartered Accountant.

Marang Denalane – Associate Director. Marang is an Associate Director at Sphere. Marang’s key focus will be on deal generation, execution and the post-investment management of Sphere’s portfolio companies.

Marang spent two years as a portfolio manager and research analyst at Futuregrowth Asset Management, where her primary responsibilities included in-depth fundamental research, identification and selection of listed equity investments for inclusion in portfolios, portfolio optimisation and business and strategy development.

Prior to joining Futuregrowth, Marang gained four years experience in the investment management industry at SCMB Asset Management. She has gained invaluable exposure to the listed equity environment and has covered a wide range of industry sectors and developed extensive networks in the retirement fund industry.

Marang graduated from the University of the Witwatersrand with a BCom and was awarded a CFA charter from the Association for Investment Management and Research.

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3. Operating Structure and Business Model

Sphere’s operating structure is set out and discussed below:

Private Equity

Sphere has concluded an agreement with Ethos Private Equity Limited, the number one rated private equity manager in South Africa. The transaction with Ethos consists of Ethos introducing a BEE shareholding of 50.1% in Ethos and the formation of Sphere Private Equity in which Sphere and Ethos hold 70% and 30% respectively. Sphere Private Equity, which will be managed and controlled by Sphere, will benefit from the relationship with Ethos in the following key areas:

• skills transfer resulting from Ethos executives working alongside Sphere executives on transactions;
• transfer of Ethos’s private equity technology to Sphere Private Equity, which will ensure that Sphere Private Equity implements leading edge investment processes and disciplines in its investment approach;
• access to Ethos’s deal flow, to the extent that the deal flow is appropriate to Sphere Private Equity;
• representation of experienced Ethos executives on Sphere Private Equity’s investment committee; and
• co-investment opportunities between Ethos Fund V and Sphere Private Equity.

Sphere and Ethos are currently raising Sphere Fund I and Ethos Fund V, which are independent but linked Funds that will be managed by Sphere and Ethos respectively.

Sphere intends to implement a unique strategic equity partner model that will position it to actively participate in the strategic management of its investee companies. This will be achieved through partnering the investee companies in their transformation process and:

• identifying black professionals from Sphere’s well established network and appointing them to senior executive positions at Sphere’s investee companies;
• advising investee companies on organisational transformation strategies including culture re-orientation, employment equity strategies, procurement transformation strategies, and structuring of meaningful, sustainable empowerment relationships. Sphere and its network of leading empowerment service providers will offer these strategic services; and
• ultimately driving revenue generation and profitability for the investee companies.

The alignment of Sphere’s interest as a shareholder with those of other shareholders in the investee companies will ensure that services rendered by Sphere or its nominated executives will be driven by the objective of creating and maximizing value for all shareholders.

The shareholders and executives of Sphere have considerable expertise in working with key decision makers and policy formers in the government and leading private sector groups. This skills set and experience enables Sphere to provide insight and support to the strategic partners in the implementation of credible and sustainable empowerment oriented strategies in the public and private sectors.

Strategic Investments

Sphere intends to focus on a limited number of strategic investment opportunities where it can draw on the experience of its shareholders and management team to add significant value whilst ensuring that meaningful and sustainable empowerment is achieved. These opportunities would be considered as strategic investments for Sphere only in instances where the opportunity does not fit the requirements of Sphere Private Equity’s investment strategy (e.g. opportunities in natural resources or opportunities where there is no exit strategy over the Funds investment horizon).

Sphere has recently acquired a 25% interest in Babcock Nthuthuko Engineering (Pty) Limited, a subsidiary of Babcock Africa Services (Pty) Limited, which is predominantly involved in the maintenance of boilers at Eskom power stations. Babcock Nthuthuko also has a close relationship with the broader Babcock Africa Group, whereby Babcock Ntuthuko will tender for projects with the assistance of Babcock Africa. The intention over time is for Sphere to be the Black Empowerment Partner of the Babcock Africa Group.

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4. Ownership Structure

Sphere’s ownership structure is designed to promote broad based empowerment whilst ensuring that directors and management are appropriately incentivised:

• 17.5% shareholding in the Company has been reserved for investment groups / community trusts with broad based beneficiaries:
  • Ditikeni Investment Company Limited (“Ditikeni”): Ditikeni is an investment vehicle for 24 non-government organisations involved in education and training, health (HIV/AIDS), housing and rural development.
  • The Student Sponsorship Program (“SSP”): SSP is a non-profit organization offering scholarships to previously disadvantaged students to attend Johannesburg’s best secondary schools. The goal of the programme is to ensure that each student excels, receives university-acceptable marks, and has access to tertiary education. There are currently in excess of 200 students funded by SSP.
  • Sphere is in the process of identifying suitable organisations for the allocation of the remaining shares reserved for broad based groupings. Some of the criteria which have been applied in identifying these groups are their geographic reach, the meaningful impact on Black women and Black youth and the focus on education as a pillar of the sustainable development of Black people.

Sphere Broad-based Shareholder Base

Organisation	Focus	Activities	Area
Student Sponsorship Programme		SSP is a non-profit organization offering scholarships to previously disadvantaged students to attend Johannesburg 's best secondary schools. There are currently in excess of 200 students funded by SSP.	Gauteng
Ditikeni Investment Company comprising: Association for Physically Disabled	Physically disabled people	Various services to over 1 000 physically disabled people through 18 branches	Western Cape
Association for Rural Advancement	Rural poor	Redress past injustices, to secure tenure for all, and to improve the quality of life and livelihoods of the rural poor. AFRA works with black rural people in Kwa-Zulu-Natal whose land and development rights have been undermined, whose tenure is insecure and who do not have sufficient access to land and resources to fulfil their developmental aspirations or basic needs.	Pietermaritzburg,Kwa-Zulu Natal
The Black Sash Trust	Poor women and elderly people.	Aims to put human rights into practice and works towards efficient and honest administration of social benefits, lobbies for effective and equitable legislation and promotes better budgetary allocations for social security.	Cape Town
Cala University Students Association	Students.	A developmental organization.	Transkei
CDT Foundation Inc.	Churches and church organizations.	Administers funds and investments on behalf of a number of churches and church organizations. It owns numerous church properties, for example an outreach programme in Hillbrow. CDT manages funds for projects such as an AIDS Educational project, support for rural communities. It also provides loans to member churches and their projects.	Johannesburg
Church land Programme	Churches	Helps churches deal with the challenges arising from their own large land tracts. CLP helps churches maintain a dialogue with residents on the land, encourages mutually agreed solutions, works with communities to improve their capacity to negotiate for land rights, conducts audits of church land holdings, and contributes to the theological debate relevant to its field.	Pietermaritzburg
Centre for Early Childhood Development Trust	Children in African countries	The Centre is a national resource providing training, support and advice in the field of early childhood development, by offering courses and programmes aimed at enhancing individual and organizational capacity; by developing and disseminating resources; and by carrying out research especially related to the Southern African context. Programmes include practitioner training, governance training and capacity building, leadership development, combating HIV Aids and organization development.	Based in Cape Town and Pretoria
Centre for Study of Violence and Reconciliation	Youth and victims of violence, abuse and criminal injustice.	Works for reconciliation through violence prevention initiatives, empowerment of victims, institutional transformation, and the redressing of injustices. Programmes deal with the political transition, youth matters, gender issues, criminal justice, and victim empowerment. Education programmes are carried out to support the programmes.	Johannesburg
Development Action Group	The low-income community.	Supports and implements community housing by securing well-located land for low income housing, and finding appropriate housing finance.	Cape Town
Diakonia Council of Churches		Help its 15 member denominations respond effectively to priority social issues: economic justice, economic empowerment for unemployed people, HIV/Aids, stress and trauma healing for the victims of violence, democracy especially in relation to local government in the eThekwini Municipality . The organization also funds eight community resource centres in the townships and runs the Diakonia Centre as an enabling environment for NGOs, providing office accommodation and conference facilities.	Durban
Gender Education and Training Networks	Local community.	Works with local authorities to integrate gender perspectives in policy, planning and implementation, carries out educational programmes on masculinity to raise gender awareness, trains local people in the field of gender equality and provides consulting services to numerous public organizations. Publications and training material on gender issues are prepared. Attention is given to the implications of poverty, HIV/Aids and gender-based violence,	Cape Town
Labour Research Service	Large Unions in South Africa	Provides research, training and media services to most of South Africa 's largest unions. Programmes include research support for the Community Growth Fund, the unit trust jointly owned by Old Mutual and the unions, a library, a database of wage agreements in collaboration with the Department of Labour, research projects commissioned by unions and education and training courses for shop stewards. LRS initiated South Africa 's only radio programme for workers, “Workers World”.	Cape Town
Namaqualand Association for Pre-School Education	Pre-school children, staff, committees and parents	Provide services to 1 500 children. The organization won the Northern Cape Premier's Award in 2001. NAPE is an advocacy organization for pre-school education in the province. It was chosen to distribute educational toys by the De Beers Educational Equipment Scheme. NAPE assists with fundraising, and organizes training courses for pre-school staff, committees and parents. NAPE is now planning an after-care service for children with learning problems in three pilot communities.	Northern Cape
National Institute for Crime Prevention & Reintegration of Offenders (NICRO)	Victims of crime and ex-offenders.	Employs staff and volunteers on programmes such as Prison Art, Victim Support, economic opportunities, and Offender Reintegration. NICGO has moved beyond traditional welfare approaches to developing community-based initiatives and strategic partnerships. NICRO “supports victims of crime and challenges ex-offenders to become constructive members of society”. A major innovation is the “diversion” of young offenders from the criminal justice system towards youth development programmes.	National
New World Foundation	Local communities.	Works in Lavender Hill, one of the poorest communities in the Cape Flats . Its programmes include a pre-school, courses and classes for local residents, and efforts to deal with social problems such as gangsterism. The Foundation was instrumental in having the Vrygrond squatters properly housed and the creation of a Community Aged Centre. Training courses embrace both vocational and “life skills”. Staff are assisted by volunteers.	Cape Town
Nonceba Centre Trust	Child victims of abuse.	Nonceba family Counselling Centre is the only place where the child victims of sexual abuse are assisted in Khayelitsha, which is home to 500,000 people. The centre provides Victim Support through counselling, bringing in appropriate skills for each individual and Prevention of Abuse through education. Four schools with 2,500 children and 70- teachers are participating.	Cape Town
Non Profit Partnership	Non Profit Organizations	Aims to strengthen the financial sustainability of the non-profit sector. Training courses and well-researched publications assist NGOs to raise and manage finance more effectively. The legal framework gets special attention. NPP also lobbies for improved tax regime for non-profit organizations. Workshops are held in towns and cities countrywide on issues such as governance and fundraising.	Cape Town
Non Profit Partnership contd.		NPP promotes volunteering and through its associated organization, Charities Aid Foundation of Southern Africa, the “Give as you Earn” programme at companies such as BP and ABSA.
Pietermaritzburg Agency for Christian Social Awareness	Churches and communities.	Works with the Churches and communities to raise awareness of human rights issues. Research on the survival methods of women in extreme poverty; citizenship programmes in rural areas; ecumenical initiatives on economic justice, democracy and Aids; and awareness programmes on conflict resolution and violence affecting women, are among PACSA's programmes.	Pietermaritzburg
Social Change Assistance Trust	Rural development	Offers training to committees and staff, and innovative fundraising incentive scheme to encourage local fundraising. SCAT's clients provide para-legal services to the local community, lobby for infrastructural development from local and regional government, and carry out a variety of local programmes to develop their communities.	Cape Town
South African Council of Churches	Community assistance.	Operate five Key Programme Areas: Emergency Relief, Ensuring Justice, Health, Poverty, Eradication, and Reconciliation and Healing, in close association with nine provincial councils. Examples of their work include the re-housing of people affected by the 2000 flood disaster in Mpumalanga , Limpopo and North West interaction with the government on restitution for the victims of apartheid and an ethical investment project.	National
Trust for Community Outreach and Education	Rural development	Programmes include adult based education, lobbying to reform (AIDS/HIV matters, local government, access to social grants, access to land), local economic development (income generation programmes) and natural resource utilization. Communities served by TCOE typically identify needs such as clean water, access roads, clinics and grazing fields.	National
Umeme Innovations		Aim to contribute to the empowerment of the oppressed people and the expansion of a self-reliant ethos. Current programmes include peace and anti-racism education, literacy for self-reliance, a joint programme for youth and anti racism with the City of Rotterdam and a partnership with a Northern Ireland youth organization.	Durban
Workers' Education Project	Major Union Federations and Community based organizations	Provides training courses to organized labour. The courses cover topics such as labour and training legislation, financial management, case handling, paralegal and fundraising skills, business skills and writing and presentation skills.	Johannesburg

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5. Contact Details

All communications and enquiries relating to Sphere should be addressed to the individuals listed below:

Itumeleng Kgaboesele	Pulane Kingston
Chief Executive Officer	Executive Director
Tel : +27 11 215 8303	Tel : +27 11 215 8304
i.kgaboesele@sphereholdings.co.za	p.kingston@sphereholdings.co.za
Aadil Carim	Marang Denalane
Executive Director	Associate Director
Tel : +27 11 215 8306	Tel : +27 11 215 8305
a.carim@sphereholdings.co.za	m.denalane@sphereholdings.co.za