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Johannesburg - Italtile [JSE:ITE] on Tuesday announced the exit of
Arrow Creek as a BEE shareholder of the company.
The JSE-listed ceramic tiles retailer in 2007 entered into a
BEE deal in which 10.7% of its entire issued ordinary share capital was issued
to The Italtile Empowerment Trust‚ Four Arrows Investments 256 Proprietary
Limited and Arrow Creek Investments 74 Proprietary Limited.
In terms of subscription agreements‚ between Italtile and
Arrow Creek and Italtile and Four Arrows‚ immediately following the issue of
Arrow Creek shares and the Four Arrow shares‚ Italtile subscribed for 600‚000
preference shares in Arrow Creek for an aggregate subscription price of R120.6m
and 800‚000 preference shares in Four Arrows for an aggregate subscription
price of R160.8m.
Italtile said its shareholders reached an agreement on May
28 in terms of which Aka Capital and the trustees for the time being of The Aka
Capital Education Trust would exit the investments that they hold in Italtile
through Arrow Creek.
In terms of the Arrow Creek sale agreement‚ Italtile
Ceramics‚ a wholly owned subsidiary of Italtile‚ will acquire 100% of the
issued ordinary share capital of Arrow Creek for a total consideration of R100.
In terms of the restructuring of the initial BEE transaction
Italtile requires the Arrow Creek shares to continue to be owned by a BEE
shareholder‚ accordingly‚ the Italtile Foundation Trust has been created in
order to acquire the Arrow Creek shares.
“This will require the necessary funding to pay the R120.6m purchase
consideration due to Arrow Creek. Such funding will be provided to the
foundation trust by Italtile in the form of a loan amounting to R120.6m‚”
Italtile said.
At least 85% of all distributions made by the foundation
trust will be for the benefit of black people‚ the company added.
In terms of the agreement dated May 28 between the foundation trust and Italtile‚ the Italtile loan is interest free and is repayable in full on the tenth anniversary of the advance date.
