http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 17.95Change: -0.16
R/$ = 15.88Change: -0.04
Au 1197.58 $/ozChange: 4.53
Pt 934.00 $/ozChange: 1.50
 
 
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
 
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 About 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

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
 
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 6 hours ago Steel producer Evraz Highveld Steel and Vanadium announced on Wednesday that the Department of Labour had put a “pause” to Training Layoff Scheme (TLS) payments in response to confirmation that the proposed sale of the business to International Resources Limited...
Updated 6 hours ago About 2 000 workers at LafargeHolcim's South African unit will on Thursday launch an open-ended strike over pay, a labour union said on Wednesday. "The industrial strike would encompass the entire workforce and it will be a total withdrawal of labour by our members...
Updated 7 hours ago French Economy, Industry and Digital Affairs Minister Emmanuel Macron has announced the creation of six new French tech hubs in Cape Town, San Francisco, London, Tokyo, New York and Hong Kong. “I am delighted that Cape Town has been designated as a French tech hub....
More
 
 
Recent Research Reports
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
Energy Roundup – February 2016 (PDF Report)
The February 2016 roundup covers activities across South Africa for December 2015 and January 2016 and includes details of a Government Gazette notice that confirms Cabinet’s decision to move ahead with the 9 600 MW nuclear procurement programme; State-owned power...
Energy Roundup - December 2015 (PDF Report)
The December 2015 roundup includes details of State-owned utility Eskom’s application to claw back R22.8-billion; South Africa’s ranking as an investment destination for renewable energy; and a nuclear expert’s thoughts on reactor designs for South Africa’s nuclear...
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
 
 
 
 
 
This Week's Magazine
Power and automation company ABB is in the launch phase of its highest payload, multipurpose industrial robot, the IRB 8700. The robot has a reach of 3.5 m and can handle a payload of up to 800 kg. “When designing the IRB 8700, we emphasised reach and payload, as...
Identity and Access Management (IAM) is a critical facet of a connected security ecosystem, as controlling the confidentiality, integrity and authorisation of data access and use is key to securing new digital business channels. However, companies face several...
RORY YOUNG Managed security services provide companies with a means to actively monitor their environment and ward against threats
Data underpins digital business models, the digital economy, the Internet of Things and the fundamental changes in the ways people interact and protecting data is crucial to securing new ways of doing business, says T-Systems South Africa information and...
The City of Cape Town will issue a tender for the procurement of electric buses for its MyCiTi service, in line with the council’s commitment to lower its carbon footprint, says executive mayor Patricia de Lille. The tender, to be advertised early in February, will...
The iSimangaliso Wetland Park Authority signed a R10-million contract last month with local tailings storage facility specialists Cyclone Engineering Projects to remove about 100 000 m3 of dredge spoil obstructing the natural course of the uMfolozi river, in...
 
 
 
 
 
 
 
 
 
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 $149 Close
Subscribe Now for $149