Aug 15, 2008
Logistics company announces BEE dealBack
© 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 and Logistics News
Total technology solutions provider Tenova Mining & Minerals’ client support services division secured the supply and installation contract in November last year for the refurbishment of a Redler chain elevator for a brewery in Johannesburg. The contract was awarded...
Johannesburg-based forklift sales and rental company Action Equipment Company (AEC) won its second generator and forklift supplier Kipor Dealership of the Year award in a row, in November last year, following sales of over 50 Kipor forklifts in 2014. Kipor South...
Since July last year, honeycomb paperboard and corrugated pallet manufacturer Kimmo has been supplying KimmoBin honeycomb paperboard crates, each month, to the South African branch of global materials handling equipment manufacturing and distribution company Bell...
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
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.