A consortium led by Tokyo Sexwale's Mvelaphanda Holdings has been given the option to purchase up to 27,8-million shares in JSE-listed construction materials supplier Afrimat, which would boost the company's black economic-empowerment (BEE) shareholding beyond the 26% required by the Mining Charter, it said this week.
Existing BEE shareholder Mega Oils would shortly sell its 14,4-million shares to Mvelaphanda, while Afrimat was in discussion with its other BEE shareholder Kwezi Mining, to secure options for the consortium to acquire its 7,9-million shares in Afrimat.
Further, the company announced that it would also extend an option to Mvelaphanda to acquire 13,4-million new shares over three years, subject to shareholder approval.
On conclusion of the deal, the consortium would be entitled to nominate two directors to Afrimat's board.
Afrimat CEO Andries van Heerden explained that the deal had been structured to benefit existing shareholders, as there would be no immediate dilution and limited incremental dilution over the next three years.
Afrimat chairperson Matie von Wielligh added that the consortium's ability to add strategic value for the group was a key factor in its selection as BEE partner.
He said the consortium's assistance in converting old-order to new-order mining rights was critical. "Previous share issues to Afrimat's black partners had fallen short of the 26% required by the Mining Charter, [and which was] necessary for the issue of new-order mining licences."
Meanwhile, the consortium was in ongoing discussions with some of Afrimat's founding shareholders to acquire additional shares in order to grow its stake.
Van Heerden said the consortium's investment and interest in growing its stake going forward affirmed Afrimat's strong growth prospects.
Mvelaphanda CEO Mark Willcox commented that this investment was "an exciting new venture in the sector".
"The prospects for the sector are good, and particularly promising for Afrimat given its expertise and positioning. Mvela will leverage off its extensive networks and investment experience to identify new growth opportunities for Afrimat," he added.
The deal was also expected to facilitate Afrimat's plans to expand into Africa. "We intend to leverage Mvela's widespread activities as a springboard for the group to penetrate markets in which we have not previously operated and expand our operations beyond South Africa," said van Heerden.