Rescue plan seeks private investors

The private sector has been invited to invest in, and rescue, the Eastern Cape’s amalgamated Majola and Magwa tea estates.

TEA FOR MORE THAN TWO: Workers busy in the fields at the Magwa Tea Plantation. Magwa and its counterpart, the Majola Tea Estate, have been amalgamated in a new rescue plan which envisages a 51% controlling share for private investors Picture: LULAMILE FENI

The Eastern Cape rural development and agrarian reform department (DRDAR) yesterday issued a call for expressions of interest in buying 51%, a controlling share, of the estates.

The department’s MEC, Mlibo Qoboshiyane, said the Majola tea estate was incorporated into the Magwa tea estate after a court process in which “workers resolved to join the two tea estates to form a single incorporated tea estate”.

The incorporated estate employs 2500 people and takes up 10000 hectares of prime agricultural land near Lusikisiki, said the MEC.

“With the 100% of Magwa tea estate ownership having been transferred from the Eastern Cape Development Corporation to the department, the government has developed a new shareholding structure to attract private sector investors,” Qoboshiyane said.

The new shareholding structure is slated to give the private investor a controlling majority share of 51%.

The remaining shares will be divided up with 26% going to the surrounding community, 13% to employees and 10% to the government.

“The private equity partner will be required to fund the 51% equity share by contributing 51% of the funding required in the approved business plan.

“A lease agreement with the community in lieu of the 26% shareholding may also be considered in proposals,” Qoboshiyane said.

All the stakeholders were being consulted about the business rescue and the long-term financial stability and operations of the tea estates, Qoboshiyane said.


“Provincial treasury has committed to allocate R116-million for the tea estate rescue process to improve tea production on the incorporated tea estate and this will add to the R20-million our department, DRDAR, has already transferred to the business rescue practitioner for interim operational requirements.

“Interested investors will be expected to submit a detailed approach and methodology explaining how the tea estate could be turned into a profitable and sustainable operation.


“Government will provide support to the investors and this will ensure that production goes unhindered,” said Qoboshiyane.



Have your say