http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.01Change: 0.00
R/$ = 10.66Change: -0.04
Au 1288.00 $/ozChange: 0.50
Pt 1424.00 $/ozChange: -2.00
 
 
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 Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 12, 2008

Barloworld unveils R2,4bn empowerment deal

Back
 
Africa|Aggregate|Barloworld|Education|Gandaganda Empowerment Trust|Ikamva Labantu|Industrial|Izingwe BAW Holdings|Jubada Akoo Family Trust|Y Akoo Family Trust|Zwavhudi Investment Holdings|Africa|South Africa|Automotive|Community Service Groups|Logistics|Clive Thomson|Dumisa Ntsebeza|High Caliber R-103 FM Radio|Ricoh Caplio R40 Digital Camera
Africa|Aggregate|Education|Industrial||Africa||Automotive|Logistics||
africa-company|aggregate|barloworld|education-company|gandaganda-empowerment-trust|ikamva-labantu|industrial|izingwe-baw-holdings|jubada-akoo-family-trust|y-akoo-family-trust|zwavhudi-investment-holdings|africa|south-africa|automotive|community-service-groups|logistics|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 (150 word limit)
 
 
 
 
 
 
 
 
Other Video News
More
 
 
Latest News
Science and Technology Minister Naledi Pandor
Updated 46 minutes ago South Africa did not produce enough graduate engineers, which was worrying, as good engineering made a significant contribution to social welfare, Science and Technology Minister Naledi Pandor said on Monday. Speaking at the official opening the United Nations...
Telecommunications and Postal Services Minister Dr Siyabonga Cwele
Updated 1 hour 58 minutes ago As South Africa entered the “spring” of its ambitious South Africa (SA) Connect broadband strategy, Telecommunications and Postal Services Minister Dr Siyabonga Cwele on Monday assured stakeholders that South Africa’s information and communication technology...
Updated 2 hours 11 minutes ago South African utility Eskom said on Monday that a report in a business newspaper that power supply would be "highly constrained" for the next five years was a "worst-case scenario." "It would not be correct to say categorically that it would take five years. That is...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
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