NEF funds R35m Delswa buyout, BUSINESS REPORT (Star)
HOT ON the heels of a public furore caused by the revelation that the National Empowerment Fund (NEE) had financed a luxury retail boutique with R34 million, the governmentfunded lender said last week that it was increasing its exposure in the clothing and textile industry by funding the buyout of a niche corporate clothing manufacturer. The R35m funding from the NEF will enable management of clothing company Delswa Group to buy a 42.3 percent stake in the business and staff to acquire 9.1 percent, while Nehawu Investment Holdings (NIH) will take a 25.1 percent stake. The NEF said it did not fund the NIH equity stake, with the NIH pay ing R2.5m for its 25.1 percent interest. However, the fact that the funding structure required an equal split between debt and equity means that the union investment company indirectly benefited just like all other shareholders, from the NEF's debt funding injected into Delswa.