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Paper and packaging group Mpact has concluded a broad-based black-economic empowerment (BBBEE) deal that will see a purpose-formed trust subscribing for 10% of the ordinary issued shares in group subsidiary Mpact Operations, which
holds its South African businesses.
The company last month resolved to pursue a BBBEE ownership transaction by establishing the Mpact Foundation Trust, which would, through its wholly-owned subsidiary Mpact Foundation, act as the BBBEE partner to the group following the exit of its previous BBBEE partner Shanduka Packaging in 2012.
Mpact confirmed on Wednesday that the Mpact Foundation Trust and the Mpact Foundation had since been established.
The beneficiaries of the Mpact Foundation Trust would include Mpact Operations employees; emerging entrepreneurs, suppliers and customers involved in the packaging or recycling sectors; primary, secondary and tertiary education initiatives; and other individuals or groups that operated within the communities in which the Mpact Operations operated.
In addition, at least 85% of distributions to further the Mpact Foundation Trust's objectives would be used to benefit black people, of which at least 40% must be black women.
The group outlined that the transaction had been structured to achieve “true” empowerment; create a sustainable funding structure that was not reliant on external bank funding, share price appreciation or dividend payments; materially improve its BEE credentials; and preserve exiting shareholder value.
“We view this BBBEE deal as a flagship empowerment initiative and look forward to not only continue with our existing BBBEE projects, but also pursue new empowerment initiatives that have been identified to make a real difference in South Africa,” CEO Bruce Strong said in a statement.