http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.14Change: -0.15
R/$ = 12.05Change: -0.20
Au 1200.03 $/ozChange: -6.12
Pt 1139.50 $/ozChange: -16.00
 
 
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
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Video News
More
 
 
Latest News
Two influential US senators, central to the so-called ‘chicken war’, have announced their intention to pursue amendments to the African Growth and Opportunity Act (Agoa) to secure greater access for US poultry into the SA market. “We believe passionately in Agoa’s...
The Independent Communications Authority of South Africa (Icasa) on Friday published the findings of a discussion document on South Africa’s television and radio local content environment. Icasa last year requested industry input as it reviewed and revamped...
Buying the catering unit of cash-strapped state airline South African Airways (SAA) could work for Bidvest Group, its chief executive said on Friday. SAA is considering selling some of its units including its inflight and airport lounge catering business, Air Chefs,...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in 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...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
SMART DISTRIBUTION Providing funds to introduce smart grid technologies in the absence of a clearly defined strategy will not result in the desired outcome
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan 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 $96 Close
Subscribe Now for $96