Property company Balwin Properties intends to further advance its empowerment objectives by increasing black participation within the Balwin group.
To achieve this, Balwin is progressing its black economic empowerment (BEE) transaction and, in particular, “seeks to set itself apart from other similar transactions” by offering a measure of protection to BEE shareholders during the lock-in period, while simultaneously ensuring meaningful participation of the BEE shareholders in declared distributions by Balwin.
Balwin also seeks to procure the necessary undertakings and commitments from the BEE shareholders in respect of their funding obligations, while ensuring the commercial interests of Balwin are maintained.
In doing so, Balwin hopes the transaction will “serve as a yardstick” for the conclusion of similar transactions in the future.
Since its listing on the JSE in 2015, Balwin has embraced transformation in its business in line with the company’s objective of working with the South African community rather than in isolation.
Balwin says it has made considerable efforts to transform its business over the past few years and supports the principles and objectives of the Broad-Based Black Economic Empowerment (BBBEE) Act.
Additionally, a BBBEE transformation charter has been developed, which outlines Balwin’s BBBEE strategy and sets out the structures and processes which are being implemented to enable Balwin to reach a compliant status this year.
In terms of the BEE transaction, Balwin says it believes Reginald Kukama will be a value-adding partner who “possesses the functional and technical expertise” to complement the existing management’s skillset and to achieve the ambition of growing the Balwin brand within the South African market.
Kukama holds a Bachelor of Architectural Studies and a Bachelor of Architecture from the University of Cape Town, as well as an MSc in Urban Design in Development from the University of London.
The shares in Balwin will be subscribed for by the BEE special purpose vehicle (SPV), controlled by Kukama and, for the purpose of holding the interests of the strategic black partners in Balwin.
To ensure that Balwin obtains sufficient points on its ownership scorecard, the BEE SPV will ultimately be owned by Kukama, who will hold 51% of the SPV, with the balance to be owned by women and the youth.
The BEE SPV will subscribe for more than 47.2-million shares in Balwin and will consequently become a 10% shareholder in the company.