http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.69Change: -0.05
R/$ = 12.32Change: -0.01
Au 1168.78 $/ozChange: -0.02
Pt 1083.00 $/ozChange: 1.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 12, 2008

Barloworld unveils R2,4bn empowerment deal

Back
 
 
 
 
 
 
Africa|Aggregate|Education|Industrial|Sustainable|Africa|Automotive|Logistics|Service|Operations
Africa|Aggregate|Education|Industrial|Sustainable|Africa|Automotive|Logistics|Service|Operations
africa-company|aggregate|education-company|industrial|sustainable|africa|automotive|logistics|service|operations
© Reuse this Diversified industrial and logistics company Barloworld on Thursday announced the details of its black economic-empowerment (BEE) deal to the value of R2,4-billion.



The company would sell a 10% stake to black participants, including strategic black partners (SBPs), employees, an educational trust and a community group.

SBPs, of which there were seven, would hold R1,384-billion, or 5,88% of the issued ordinary share capital of Barloworld; employees, including black nonexecutive directors, would hold in aggregate 2,39%, or R562-million, of its shares; an educational trust would hold 0,78%, or R184-million stake; and community service groups (CSGs) would own 0,95%, or R224-million, of Barloworld's shares.

"With this transaction, Barloworld in South Africa will never be the same - they will be the better for it," said Barloworld chairperson Dumisa Ntsebeza.

Barloworld CEO Clive Thomson indicated that empowerment and transformation were one of the group's five key focus areas, and following the PPC and Freeworld Coatings unbundling, the group could forge ahead with its commitment to lead in the transformation and empowerment arena.

The transaction value was based on the 30-day volume weighted average share price of R103,87 an ordinary share in the share capital of Barloworld, which was calculated for the 30 trading days, ending on Friday, June 6, 2008.

In a note to shareholders, the company stated that the effective black ownership of Barloworld's South African operations after excluding mandated investments and offshore assets, was about 29%.

Upon first inspection, analysts at the presentation regarded the BEE deal as a "very well constructed transaction".

The funding structure and Barloworld facilitation of the deal would include a R1,504-billion term loan funding structure, where Barloworld provides SBPs and CSGs with ability to raise funding at a competitive credit margin; a R40,4-million equity contribution from strategic black partners (3% of investment); a R4,5-million equity contribution from community service groups (R1,5-million each); R504-million through a notional vendor facilitation structure - black managers trust and education trust; and a R245-million cash contribution through general staff trust and black nonexecutive directors trust.

In the case of the SBPs and black nonexecutive directors, all dividends paid within the first seven years would go towards loan repayments. The education trust would receive a 'trickle' dividend, which partially went towards loan repayment.

The SBPs in the BEE deal, which would acquire 5,44% of the company comprised the Gandaganda Empowerment Trust, the Y Akoo Family Trust and the Jubada Akoo Family Trust, Zwavhudi Investment Holdings, Ayavuna Women's Investment, Izingwe BAW Holdings, and Moty Capital Partners Consortium.

Barloworld said it was in negotiations with an additional SBP, with an existing relationship with Barloworld, for the acquisition of 0,44% of Barloworld's increased share capital. This seventh partner would likely come from the fleet side of the automotive division of Barloworld.

"I think we are in good hands, and I have got every confidence, that over the next seven years, that Barloworlds performance will be fantastic, and if Barloworlds' performance is fantastic then the share price will rise, and dividend flows will be good, and the transaction will be sustainable," Thomson emphasised.

The CSGs, which would own 0,95% of the company, were the DEC Investment Holding company, Ikamva Labantu, and the Shalamuka Foundation.

A number of parties expressed interest in participating in the deal, but Barloworld stated that it had a rigorous selection process based on the Department of Trade and Industry codes. Ability to add value to Barloworld, BEE credentials, broad-based black shareholding level, women shareholding level, and acess to equity funding were characteristics under scrutiny.

The company stated that it had developed a strategy to support the principles of broad-based black economic-empowerment (BBBEE), which aimed at achieving a meaningful number of black directors and executives in Barloworld and its subsidiaries; a staff complement that reflected South Africa's diverse demographic profile; procurement policies that recognised BBBEE; and social development programmes that were primarily directed at developing and empowering previously disadvantaged communities.


Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Video News
More
 
 
Latest News
An end to wage negotiations within the local government sector could be in sight as a conciliator’s proposal, setting out a number of settlement suggestions to resolve the deadlock, was expected on Monday. The Independent Municipal and Allied Trade Union (Imatu)...
Development financier Eastern Cape Development Corporation (ECDC) executive Noludwe Ncokazi on Friday said the organisation had the “huge responsibility of ensuring business continuity”, following the resignation of ECDC subsidiary Automotive Industry Development...
South Africa’s second-largest oil refinery, Engen Refinery (Enref), is set to undergo a three-day planned maintenance outage from July 9 as part of an ongoing maintenance programme to ensure that the facility, which delivers a significant portion of South Africa’s...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
NHLANHLA NENE The main constraints to economic growth are domestic
Finance Minister Nhlanhla Nene earlier this month stated that, while South Africa’s 2015 economic growth target of 2% was achievable, it was not enough to deliver the tax revenue needed to combat the country’s challenges.
The World Steel Association has published the 2015 edition of the World Steel in Figures report, which shows an increase in steel production as well as provides an overview of steel industry activities from crude steel production to apparent steel use.
The 25-year master plan for Gauteng’s Aerotropolis project will go through a process of approval and adoption during June and July, says Aerotroplis project manager Jack van der Merwe. “We are also in the process of putting together a special purpose vehicle (SPV) to...
SOLAR PANELS The existing buildings in the Coega Industrial Development Zone lent themselves well to rooftop solar panel installations
The Coega Development Corporation (CDC) plans to fit 15 of its buildings, totalling 127 000 m2 of roof space, in the Coega Industrial Development Zone (IDZ), in the Eastern Cape, with solar panels.
The Supreme Court of Appeal’s (SCA’s) November 2014 judgment, ordering steel producer ArcelorMittal South Africa (AMSA) to hand over the 2003 Environmental Master Plan for its Vanderbijlpark steel plant to environmental pressure groups, confirmed the right of civil...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96