Mara wants to buy back its SA smartphone factory already on auction, IDC confirms

Mara Phones at a Gauteng government handover event, in 2020. (Photo by Sharon Seretlo/Gallo Images via Getty Images)

  • Mara Phones in South Africa wants to buy back its smartphone factory after lenders took ownership of it.
  • The factory ceased operating in July 2021, nine months after its launch.
  • The IDC is considering Mara’s offer – along with those of other interested parties.
  • The corporation says it wants to recover the funds invested in the business, deliver the project’s development mandate, and save jobs.
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Mara Phones’ local management has made an offer directly to the Industrial Development Corporation (IDC) to buy back its Dube Trade Port factory, currently on auction.

The Mara Phones factory, South Africa’s first smartphone manufacturing facility, launched in 2019. Just two years into its existence, and after heavy financial backing from the government, it is on auction.

Following its demise, funders the IDC and Standard Bank took possession of the facility and instructed Park Village Auction to sell it on their behalf.

“The Mara Phones local management has made an offer to the lenders to acquire the company’s assets,” said Tshepo Ramodibe, head of corporate affairs at the IDC.

Although the IDC is considering Mara’s offer, it has embarked on an open sale process, effectively allowing other interested parties to make offers to purchase the business or its assets.

“All offers will be considered on the basis of recovery of public funds and delivery on IDC’s development mandate,” Ramodibe said.

“All expressed interests, including the local management buyout, will be evaluated against the corporation’s need to maximise the recovery of funds and deliver on its development mandate. The preservation of established production capacity and jobs is the most desirable solution,” he said.

Asked how much Mara’s management had offered for the factory, the IDC said it was in no position to disclose figures given the open sale process that has been initiated.

Total funding for the Dube Trade Port Mara Phones factory amounted to R429 million to create 450 jobs over five years. The company also received further support in a tax break to the tune of R100 million.

The IDC acted as the senior lender in the venture and approved total facilities worth R238 million.

Despite Mara Phones’ CEO pledging to inject R1.5 billion into the project, its shareholders could not raise their total contribution, and the shortfall had to be plugged by Standard Bank, the IDC said in a previous statement.

The company said it had spent roughly half of that planned capital to set up the factory at the launch.

Park Village Auctions, which is facilitating the sale of the factory, is accepting bids from interested parties until the end of February. The auction house has confirmed to Business Insider that it has not received a bid from Mara’s management team.

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