http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.49Change: 0.01
R/$ = 10.50Change: -0.01
Au 1294.90 $/ozChange: 0.00
Pt 1407.50 $/ozChange: -5.50
 
 
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
 
Nelson Mandela 1918 - 2013   Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science & Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 12, 2008

Barloworld unveils R2,4bn empowerment deal

Back
 
Barloworld|Education|Gandaganda Empowerment Trust|Ikamva Labantu|Izingwe BAW Holdings|Jubada Akoo Family Trust|Y Akoo Family Trust|Zwavhudi Investment Holdings|South Africa|Community Service Groups|Clive Thomson|Dumisa Ntsebeza|High Caliber R-103 FM Radio|Ricoh Caplio R40 Digital Camera
barloworld|education-company|gandaganda-empowerment-trust|ikamva-labantu|izingwe-baw-holdings|jubada-akoo-family-trust|y-akoo-family-trust|zwavhudi-investment-holdings|south-africa|community-service-groups|clive-thomson|dumisa-ntsebeza|high-caliber-r-103-fm-radio|ricoh-caplio-r40-digital-camera
© 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
© Reuse this Comment Guidelines
 
 
 
 
 
 
 
 
 
Latest News
Few would argue with the notion that unemployment, which stands at around 25% on the narrow definition as reported by Statistics South Africa, remains one of the country’s most pressing challenges. Fewer still could contest the view that South Africa’s education...
Renewable-energy projects, such as this Northern Cape solar farm, seen as key to low‐carbon energy supply.
Upfront investment costs will and should remain a critical consideration as South Africa moves to upscale and accelerate its infrastructure programmes. But one of the lead authors of the latest Intergovernmental Panel on Climate Change (IPCC) argues that the...
The barrier to efficient water service delivery in South Africa was not of a technological nature but rather related to legal and Constitutional challenges, Water Research Commission (WRC) CEO Dhesigen Naidoo said on Thursday. Opening a WRC debate under the theme...
More
 
 
Recent Research Reports
Steel 2014: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2014 report provides an overview of the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon steel and stainless...
Projects in Progress 2014 - First Edition (PDF Report)
This publication contains insight into progress at the delayed Medupi and Kusile coal-fired projects, in Mpumalanga and Limpopo respectively, as well as at the Ingula pumped-storage scheme, which is under construction on the border between the Free State and...
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
 
 
 
 
 
This Week's Magazine
The Electronic Systems Laboratory (ESL) of the Department of Electrical and Electronic Engineering at Stellenbosch University is strongly reaffirming its position as one of South Africa’s leading centres for satellite technology and expertise. It is currently...
MORE IN SA Phase 2 should see local content on the mainline locomotive increase from 65% to 80% by the end of 2014
The world’s lowest-cost diesel-electric locomotive is not made in China, but in Pretoria, at RRL Grindrod Locomotives’ newly upgraded 30 000 m2 plant. The company’s locomotive pricing is “more competitive than any other original-equipment manufacturer (OEM)...
The South African Defence Review 2012, released to the public at the end of last month (despite the year given in its title) recommends the creation of the post of Chief Defence Scientist. This official would be responsible for the management of defence technology...
AltX-listed engineering technology company Ansys has been awarded an R188-million contract by Transnet to supply integrated dashboard display systems to the freight rail utility’s locomotives. Black-owned and controlled Ansys developed the bespoke integrated system...
South Africa’s sole nuclear power station Koeberg, which is located in the Western Cape, breached a major operations milestone on April 4, which marked the thirtieth anniversary of Unit 1 having been connected to the grid. Eskom, which operates the two-unit plant,...
 
 
 
 
 
 
 
 
 
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