JSE-listed real estate investment trust Growthpoint Properties has asked its shareholders to approve a R250-million broad-based black economic empowerment (BBBEE) transaction in which it will allocate shares to a special-purpose corporate social investment (CSI) trust.
The trust will use dividends from its shares to fund future CSI initiatives focused on education, entrepreneurship and enterprise development.
These initiatives are actioned through Property Point, which delivers programmes that support growing small black businesses in the property sector and education projects, such as Growsmart, which assists primary school learners in the Western and Eastern Cape.
“The proposed Growthpoint CSI Trust would become a valuable source of perpetual funding for our social impact projects. It would also enhance our BBBEE credentials by helping to achieve our equity ownership targets in line with the Property Sector Code,” said Growthpoint Properties transformation and corporate social responsibility head Shawn Theunissen.
“Our proposed BBBEE deal shows Growthpoint’s commitment to providing space to thrive in environmentally sustainable buildings while improving individuals' and communities' social and material wellbeing,” says Growthpoint Properties South Africa CEO Estienne de Klerk.
“We believe, with the necessary approvals, this transaction will be a notable milestone on our transformation and environmental, social and governance journey, as we continue our long-standing track record of fostering an equitable, diverse and inclusive organisation, industry, society and economy,” he notes.
“The proposed transaction aligns with Growthpoint’s long-term vision of a more empowered South African society and economy in a way that continues to benefit the communities where we are invested, our employees and their families. Through our CSI initiatives, we strive to make a meaningful and sustainable impact on the lives of people by ensuring material improvement in their conditions,” Theunissen adds.
Further, the finalisation of the BBBEE deal will see an increase in broad-based elements of the Property Sector Charter scorecard for black ownership of Growthpoint. Growthpoint is a Level 1 BBBEE contributor.
The company will hold an extraordinary general meeting on July 19 for shareholders to consider the proposed scheme, which includes entering into a loan agreement with the Growthpoint CSI Trust to enable it to acquire the R250-million of Growthpoint ordinary shares, valued at a share price of R12.50, which is less than 0.6% of the total Growthpoint ordinary shares in issue, together with their full voting rights and dividend entitlements on the same basis as all other Growthpoint ordinary shares.
Meanwhile, the Growthpoint CSI Trust has been structured to comply with the BBBEE Act and the requirements for a public benefit organisation. Further, as a major BBBEE transaction, the scheme also needs the green light from South Africa’s BBBEE Commission.