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SA wind-up radio turns General Electric on
The US giant has seized the chance to support a SA group making the radio, writes DON ROBERTSON
Baygen has the global rights to manufacture and distribute a range of self-powered, wind-up radios which require no solar power, batteries or electricity. The company operates from its factory in Montague Gardens in the Cape. General Electric, with a market capitalisation of $169-billion and revenues of $79-billion last year, has structured the deal through the General Electric Pension Trust, advised by the GE Investment Corporation. The US group has bought 21 266 shares in BayGen for R22.25-million and has the right to double this investment by the end of August. The deal puts a value of R200-million on BayGen. Should GE exercise the second option, it will end up with a stake of just under 30% and will be able to appoint a third of the board of directors. Rory Stear, joint chairman and chief executive of BayGen, says other investors are Gordon and Anita Roddick, who own The Body Shop, a 1 500-outlet global group. After the issue of more shares to GE, the Roddicks will have a holding of about 12%. Liberty Life Foundation is another investor. It will have a diluted interest of 12%. The Freeplay radio, which has AM, FM and SW frequencies, was developed in 1991 by British inventor Trevor Baylis. He created a clockwork mechanism which stores energy and can deliver electricity on demand. A spring generator activated by a wind-up device produces the power, removing the need for any other source of energy. In the new Freeplay radio to be launched in July, the listener needs only to wind the spring mechanism for about 30 seconds for a full hour of playing time. Two South African executives, Stear and Christopher Staines, recognised the enormous potential of what has since been dubbed "personal power generation" and acquired the world rights to market Freeplay radio. They established BayGen in 1994. The deal gives BayGen access to GE's massive research and development facilities, with 2 100 science PhDs on the staff. BayGen is the only non-GE company to be offered this privilege. According to David Weiderecht, GE Investment Management vice president for alternative investments, the agreement demonstrates the multinational's faith and commitment in what amounts to a new industry, where conventionally powered products can be replaced by those using a self-powered mechanism. Says Rory Stear: "It's no thanks to South African banks that we have got this far. Many years back we could not convince them to back us and were unable to secure an overdraft, even after Liberty Life took an interest. We now have GE and one of the wealthiest families in the UK backing us." Michael Hendry, national executive of GE-Southern Africa, says the group re-invested in South Africa in 1994 and 10 of the 12 international operations are currently represented locally. "The BayGen investment is not only significant in monetary terms, but also once again underlines the confidence GE has in the South African economy and industry," he says. In 1996, BayGen produced 130 000 Freeplay radios and expects to increase this figure to 500 000 in the current year, including the new, cheaper and lighter model. With offices in the US and UK, BayGen sells Freeplay radios in America, Canada, Central America, Europe, Japan, Australia and New Zealand. The radios are also sold through Radio Shack in the US and Dixon in the UK. The radio, which costs about R249 locally, has already been bought by organisations such as Unicef and the Red Cross.
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