Jul 12, 2012
PPC unveils R1.1bn BEE deal, to expand SA mining operationsBack
Africa|Business|Cement|Charter|Efficiency|Mining|PPC|Pretoria Portland Cement|Pretoria Portland Cement Company Limited|Resources|Risk Management|Africa|South Africa|Black Women Groups|Cement Maker|Paul Stuiver|Operations
“The key reason for the black economic-empowerment (BEE) transaction was to comply with requirements of the Mining Charter,” he said in a conference call.
The broad-based black economic-empowerment (BBBEE) transaction, the group’s second in four years, entailed the placing of an additional 39.3-million ordinary shares, of which 68% would be issued to staff, 27% to PPC’s existing strategic black partners and 5% to a new trust focusing on black women groups in areas where the company operates.
This would increase the direct black ownership of the PPC group to 20.8%.
“PPC’s mining operations are often underestimated, but we have ten mining operations in South Africa. We mine a total of about 20-million tons of material a year,” Stuiver said.
Noting that these were “quite sizable” operations, he said that the company also had about ten mining licence conversions pending. “In principal agreement with the Department of Mineral Resources, we see this transaction taking us to a stage where our mining licences are converted,” Stuiver said.
The BEE transaction would also allow PPC to streamline its corporate structure by creating separate South African and international operating entities, thereby aligning the structure with its strategy to expand its footprint on the African continent.
“Aligning our corporate structure with our strategy will result in greater efficiency and better risk management. We were unable to do this prior to converting our South African mining rights.”
The holding company, Pretoria Portland Cement Company Limited would also be renamed to PPC Limited.
Meanwhile, Stuiver said the latest transaction was structured for the benefit of those parties closest to the business. “We were particularly keen for our 2 400 South African employees to participate at a significant level and this transaction will result in them owning about 7% of the PPC group.”
All permanent employees of PPC in South Africa would participate. A portion of shares has been set aside for new employees joining the company during the next three years.
PPC’s strategic black partners are the same as those that participated in the 2008 BBBEE transaction, namely Peu, Nozala, Portland Consortium and Palama Cement Consortium (formerly Capital Edge).
The transaction is being facilitated through notional vendor funding at a fixed rate of 6% over a seven-year period. The company would issue new shares at once cent a share and no capital would be required from the participations other than the nominal share value to be paid by the strategic black partners.
The BEE parties would be restricted with regards to selling their shares in the seven-year period of the transaction.
PPC traded at R26.27 a share on Thursday morning, down 1.20% from the previous day’s closing price of R26.59 a share.
Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here
Other Construction News
Recent Research Reports
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
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...
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...