Publications
Partners
Johannesburg - Brewery giant SABMiller's amended broad-based economic empowerment deal will cost the group a whopping R2.1bn to implement, after it increased the original size of the transaction from R6bn to R7.3bn.
Originally announced on July 1, the transaction will put 8.45% of the company's local subsidiary SAB under black ownership through the issue of new shares to SAB employees, black-owned licensed liquor stores, black-owned retailers of SAB's soft drink division ABI and the broader community through the newly-created SAB Foundation.
SAB said the increase in transaction size was in response to the recent rise of about 70% in SABMiller's dollar share price, and to accommodate a greater number of participants.
SAB MD Norman Adami said the transaction will result in a 2.4% dilution of the group's shares at current prices, but the dilution will be less than 1% after the 10-year period of the scheme.
"SAB recognises that its role as one of SA's leading companies carries an inherent obligation to demonstrate leadership in every dimension of the business, including the role we must play in supporting the progress of society," said Adami.
The group said the transaction was affordable and easily accessible. Employees and the SAB Foundation will make no upfront cash payments, while qualifying retailers will make only a small cash investment.
Black-owned retailers to benefit
Detailing the transaction, Adami said the total amount of shares to be issued was 46 million. The SAB Zenzele Employee Trust will hold 18.5 million (40%) of the newly-issued shares for the benefit of the group and its subsidiaries' permanent black employees, white employees who do not normally participate in group share option plans and other SABMiller workers who are permanent residents of SA.
SAB Zenzele, a South African-registered public company, will hold 19.2 million (42%) newly-issued SAB shares for the benefit of retailers.
The SAB Foundation will hold the remaining (18%) new shares. It will use the dividend income received from these shares for the benefit of the wider South African community.
New shareholders will have voting and economic rights in SAB. They will also be entitled to bi-annual cash dividends from the first year.
Adami also announced that BEE tycoon and SABMiller board member Cyril Ramaphosa will head the SAB Foundation.
Ramaphosa described the transaction as "unique" and said it was the kind of a broad empowerment that everyone was looking for.
"If you are going to make empowerment better, you've got to broaden it," Ramaphosa said. "Yes, it's something that should have happened much earlier, but we've been learning."
- Fin24.com
