Rand Merchant Bank has sold 35 million shares in Control Instruments Group Limited, paving the way for Kanthu Nkhama Automotive, a strategic black empowerment consortium to acquire a 25.1% stake in the automotive parts manufacturer and distributor.

RMB announced in April this year that it would be disposing of certain investments, including its holding in Control Instruments, in order to reduce its capital burden before the Basel III international bank rules come into effect.

Announcing the transaction, Control Instruments Group CEO, Sean Rogers said he was delighted that Kanthu Nkhama had acquired 35 million shares in Control Instruments saying “this transaction has assisted us in achieving the transformational objectives we set for the company at the start of the year.”

Rogers added that the Group’s improved empowerment credentials would increase its ability to qualify under the government’s manufacturing incentive programs that are available to existing manufacturing entities and aimed at enhancing competitiveness. “In addition to contributing to the transformation of the automotive industry our customers will benefit from our improved statusunder the preferential procurement element of the BBBEE scorecard.”

In Kanthu Nkhama Automotive, Control Instruments has acquired a partner that brings a wealth of experience to the Group’s expansion drive into the sub-Saharan Africa markets.

Rogers thanked RMB for its encouragement and support while it was a major shareholder and he welcomed Kanthu NKhama Automotive as a shareholder.

The empowerment consortium comprises, Solethu Investments, a leading black empowerment investment company in the Rail and Logistics sector headed by Quedekwazi (Ted) Zulu; Sandile Koza, who is involved in the automotive sector through his exclusive agreement to distribute Bardahl Oil in Southern Africa; and Kanthu Nkhama Capital, which has a wealth of expertise in the automotive sector through Stephen Smithyman and the Kanthu Nkhama team’s involvement with Control Instruments and the automotive and related industries for a number of years.

Speaking at the announcement, a spokesperson for Kanthu Nkhama Automotive said, “We are very pleased to be a major shareholder of Control Instruments and to be able to play a role in assisting in the transformation of the automotive sector in SouthAfrica. Control Instruments is a leading distributor and manufacturer of quality automotive brands in South Africa and has been operating successfully in South Africa for 64 years. We look forward to working with the board andother major shareholders of the Group to extract value for all stakeholders.”