ATTENTION ALL MULTINATIONALS

Equity Equivalents
EQUITY EQUIVALENTS COULD BE THE SOLUTION FOR YOU


WHAT IS AN EQUITY EQUIVALENT

Equity equivalents allow foreign owned multinationals to obtain BEE points on the Ownership scorecard without having to sell shares. This is typically achieved by contributing the equivalent of 25% of the value of the local operation to an enterprise development or socio-enterprise development type programme. Alternatively 4% of turnover can be contributed over a 10 year period.

HOW CAN EQUITY EQUIVALENT PROGRAMES BENIFIT THE BUSINESS?

To make an equity equivalent programme work, one needs to apply some creative business sense. HP are building capacity in their value added reseller network, boosting revenue. IBM are building a locally based, globally serving call centre. Both saw equity equivalents as an opportunity to expand their businesses.

There are plenty of other opportunities. Healthcare companies can build their brands by supporting health awareness programmes. Energy companies can build small businesses around their outlets, strengthening their brand in developing communities.

If investing in growth is part of a multinational company’s strategy then an equity equivalent presents an excellent opportunity to gain both in business and BEE.

WHAT ARE THE QUALIFICATION CRITERIA?

For a multinational to qualify for an equity equivalent they need to fulfill two criteria:

  1. The local entity must be 100% foreign owned
  2. There must be a demonstrable global practice of not selling shares in any subsidiary entity

OUR EQUITY EQUIVALENTCREDENTIALS

BEESA Consulting's Equity Equivalent Practice is headed by Benni North. While he was still at HP, Benni was the program driver responsible for designing and establishing the first, and still only, Equity Equivalent programme to be approved by the dti. Benni was also the driver behind HP achieving a Level 2 in 2007 - the first official year of BEE.

BEESA offers specialised Equity Equivalent consulting to a number of significant foreign owned multinational companies. Through experience, knowledge and research, BEESA offers a proven approach to deliver a successful solution.

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