A standard question about black empowerment deals concerns how the parties intend avoiding the frequent failures of the past. The usual answers are well meaning, but hard to judge: skills transfer, commitment to transformation, cultural fit and “real” value-add are often cited.

Two recent deals indicate that corporate financiers increasingly structure deals to bolster the chances of success.

Details of such deals become a little tricky to follow. They are predicated on the idea that merely selling shares to an empowerment partner does little to reward the contribution the empowerment entity brings to the company. Financing such deals with the shares themselves as security can leave both the financier and the empowerment company out of pocket – especially if share values drop.