12 August 2008
Swiss-based luxury goods firm Compagnie Financiere Richemont and local investment firm Remgro have announced plans to dispose of the majority of their holdings in British American Tobacco (BAT), which will see the multinational tobacco company gain a secondary listing on the JSE.
According to a statement by BAT issued last week, Richemont and Remgro presently hold 19.4% and 10.7% of issued shares in BAT respectively, in both cases through Luxembourg-based company called R&R Holdings.
As per the restructuring announced by the two groups, both controlled by South African billionaire industrialist Johan Rupert, 90% of their combined shareholding – or around 27% of the issued share capital of BAT – will be distributed directly to Richemont’s and Remgro’s shareholders.
The remaining 10% of the combined shareholding, or around three percent of BAT, will be retained by the two companies and then transferred to Reinet Investments, an investment company that will soon be listed in both Luxembourg and South Africa.
“The board welcomes these proposals, which should result in the group having a more widely distributed shareholding and a broader range of both institutional and private shareholders,” BAT chairman Jan du Plessis said in the statement.
The distributions will be followed by a rights issue by Reinet, which can be subscribed to by using British American Tobacco shares, which is expected to take place in early November and with the Reinet rights issue likely to be complete by the middle of December.
“Based on information provided by Richemont and Remgro in their announcements, British American Tobacco believes that, following completion of the distributions and the rights issue, the residual Reinet shareholding in British American Tobacco is likely to be less than 10%,” the statement said.
Secondary JSE listing
According to the statement, BAT had earlier agreed to a request from the two shareholders to obtain a secondary listing on the JSE, and was now taking the necessary steps to facilitate the listing, including seeking the approval of the JSE.
BAT expects the listing to take place around the end of October this year, subject to Richemont and Remgro receiving the necessary approvals for their proposed restructuring.
Once listed, BAT, which has a market capitalisation of around R560-billion, will be among the three largest companies on the JSE, vying for the top spot with global miners like BHP Billiton and Anglo American.
“R&R have been highly committed and supportive shareholders since the merger of British American Tobacco and Rothmans International in 1999 and these proposals resolve the potential uncertainty over the long-term ownership of their shares,” Du Plessis said.
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