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Cape Town - Old Mutual announced on Thursday the maturity of its broad-based black economic empowerment transactions that, to date, have created a net value of over R7.9bn, based on current market prices for Old Mutual’s South African empowerment partners, staff and communities.
In 2005, Old Mutual South Africa and Mutual & Federal (collectively referred to as Old Mutual) entered into the BEE transactions valued at a combined R4.1bn at the time and which represented approximately 13% of the equity value of the consolidated South African operations.
The Black Business Partners’ (BBPs') component included the Women’s Investment Portfolio Holdings (Wiphold) Consortium, the Brimstone Consortium and Mtha, for whom a combined R2.1bn in net value was created in the last ten years.
Old Mutual’s South African employees also benefited through various employee share trusts that formed part of the BEE transactions, creating net value of R4.6bn for more than 9 000 management and employees.
The company further undertook to support the development and growth of emerging financial advisors and brokers through the Old Mutual Black Distributors Trust and the Mutual & Federal Black Broker Trust.
In addition, the Old Mutual Education Trust provides scholarships for higher education to members and staff of the participating trade unions, and their dependents.
The Mutual & Federal Community Trust focused on micro enterprise development, education and skills capacity building as well as social development and welfare projects.
Collectively, these trusts delivered a net value in excess of R1.2bn, of which R925m is available for future distributions to qualifying beneficiaries.
The aggregate value that remains within these trusts will continue to be used to support and develop transformation initiatives.
“This has been a landmark BEE deal with a broad number and reach of beneficiaries. Together with our partners, these BEE transactions have created significant value in the lives of South African communities and we are looking forward to continuing this journey with Wiphold and Brimstone into the future,” said Old Mutual Emerging Markets CEO Ralph Mupita.
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Brimstone model
Brimstone formed the Brimstone Empowerment Share Trust (Best), to create a more sustainable model of support to organisations, by awarding them with Brimstone shares at no cost. Best beneficiary organisations support in excess of 3 500 000 beneficiaries spread across South Africa.
Brimstone executive chair Fred Robertson said this year Brimstone celebrates its 20th anniversary and has an established track record of creating value for all its stakeholders.
"It has paid cash dividends to its shareholders for the past 13 years. When these dividends are paid they have a direct benefit to our many broad-based NGO shareholders. Investments like Old Mutual make it possible for us to continue to deliver on our mandate, and enable us to have a real positive impact on society at large,” said Robertson.
"The partnership with the Wiphold consortium demonstrated Old Mutual’s commitment to contributing towards women’s economic empowerment as a growth strategy for South Africa."
This consortium brought together Wiphold, Sphere and the Wiphold NGO Trust, collectively reaching over 300 000 beneficiaries who are representative of the rural women from some of the most disadvantaged areas of the country.
The Wiphold consortium beneficiaries have benefitted from these BEE transactions by a net value of more than R1.4bn.
According to Gloria Serobe, executive director at Wiphold, Old Mutual’s conscious decision to partner with the Wiphold consortium was and is a demonstration of its commitment to putting women’s economic empowerment at the heart of its growth strategy for South Africa, which sets them apart from their peers.
“Our partners have been an integral part of our success to date and we have collectively agreed to continue our relationship past the BEE transactions to build and share an enduring legacy in South Africa," said Mupita.
Nedbank and Old Mutual have committed R100m each over three years to invest in initiatives aligned to the National Development Plan.
These initiatives will include the development, support and job creation of black entrepreneurs in South Africa in partnership with Brimstone, the support of small-scale agricultural commercialisation which seeks to address rural unemployment.
Other initiatives include food security and sustainability in partnership with Wiphold and the development of township economies and affordable housing in partnership with Izingwe.
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