Aug 15, 2008
Logistics company announces BEE dealBack
Africa|Aggregate|Barloworld|Barloworld South Africa|Education|Industrial|Sustainable|Africa|South Africa|Logistics|Service|Clive Thomson|Dumisa Ntsebeza|Operations
© Reuse this
In June, the company announced that a 10% stake in the company would be sold to black participants, including strategic black partners (SBPs), employees, an educational trust and a community group.
A total of seven SBPs would hold R1,384-billion, or 5,88 %, of the issued ordinary share capital of Barloworld, while employees and black nonexecutive directors, would hold in aggregate 2,39%, or R562-million, of its shares.
An educational trust would hold 0,78%, or a R184-million stake, and community service groups (CSGs) would own 0,95%, or R224-million worth of Barloworld shares.
Speaking at the public presentation of the new BEE transaction, Barloworld chair- person Dumisa Ntsebeza said that Barloworld South Africa would be improved as a result of the transaction.
Barloworld CEO Clive Thomson indicated that empowerment and transformation were one of the group’s five key focus areas.
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, by which Barloworld provided SBPs and CSGs with the ability to raise funding at a competitive credit margin.
In the case of the SBPs and black non- executive directors, all dividends paid within the first seven years would go towards loan repayments.
The education trust would receive a dividend, which partially went towards loan repayment.
“I think we are in good hands, and I have every confidence that over the next seven years Barloworld’s performance will be fantastic, and if Barloworld’s performance is fantastic, then the share price will rise, and dividend flows will be good, and the trans- action will be sustainable,” said Thomson.
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.
The ability to add value to Barloworld, BEE credentials, a broad-based black share-holding level, a women shareholding level, and access 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).
The aim of this strategy is to ensure a meaningful number of black directors and executives in Barloworld and its subsidiaries.
This includes a staff complement that reflects South Africa’s diverse demographic profile, as well as procurement policies that recognise BBBEE, and social development programmes that were primarily directed at developing and empowering previously disadvantaged communities.
Edited by: Laura Tyrer© Reuse this Comment Guidelines (150 word limit)
Other Materials-Handling News
Automated warehouses, steel mills, power stations, airports, wastewater treatment works, harbours and container handling depots can cut production time losses, when cranes fail, as engineering company Horne Group is now distributing a crane rail fastening system that...
Recent Research Reports
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.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
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 road...
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.
This Week's Magazine
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...