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BAT bows to Zim indigenisation

Oct 05 2012 09:36 Malcom Sharara, Fin24’s correspondent in Zimbabwe

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OLD MUTUAL PLC [JSE:OML]

Last traded 35.11
Change -0.29
% Change -0.01
Cumulative volume 6238988
Market cap 171.98bn

Last Updated: 01/08/2014 at 04:26. Prices are delayed by 15 minutes. Source: McGregor BFA

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Harare - British American Tobacco (BAT) Zimbabwe, a subsidiary of BAT International Holdings (UK) Limited, is set to donate shares to employees after the indigenisation ministry said the company is only 6.22% indigenous.

BAT is owned 56.95% by BAT International. The 6.22% indigenisation status effectively means shareholders like Old Mutual [JSE:OML] with a 19.1% stake are not considered indigenous, even though they hold the shareholding on behalf of policyholders.

In a circular to shareholders, BAT said it will have to meet 26% indigenous status by October 28 2012, 36% status by October 28 2013, 46% by October 28 2014 and 51% by October 28 2015.

To meet this year’s 26% indigenisation status, BAT will have to place at least 19.78% of its issued share capital in the hands of indigenous Zimbabweans by no later than October 28.

As part of the transaction, BAT International will donate 1 031 676 shares to an employee share ownership trust (ESOT). The ESOT will also acquire another 1 031 676 shares on arm’s length by way of subscription. In total the ESOT will get 10% of the issued share capital.

The second part of the transaction will see the creation of a corporate social investment trust (CSIT) which will acquire 2 220 324 shares or 10.76% on arm’s length by way of subscription.

BAT will provide financial assistance to the ESOT and CSIT To fund the transactions.

The proposed financial assistance will comprise loan facilities from BAT Zimbabwe at an interest rate of 8% per annum with no fixed repayment terms.

BAT is one of the companies performing quite well in Zimbabwe, having declared a 23 cents dividend in its last financials.

On the Zimbabwe Stock Exchange BAT is up 188.39% year-to-date.

 - Fin24

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bat  |  zimbabwe  |  indigenisation
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