24 November 2009
South African pharmaceutical company Adcock Ingram has unveiled a broad-based black economic empowerment (BEE) deal in which a 13% stake in the company, worth about R1.3-billion, will be transferred to two empowerment partners and the company’s black employees.
The BEE partners, who will acquire 9.75% of the company’s issued shares, were chosen for their business and empowerment credentials, as well as for healthcare and education initiatives they provide to underprivileged communities around the country.
“This landmark transaction for Adcock Ingram highlights our commitment to broad-based empowerment and the transformation of South African society,” Adcock Ingram CEO Jonathan Louw said in a statement this week.
Respected service providers, LoveLife
One of the chosen partners is the Kagiso Health Consortium, which comprises Kagiso Trust Investments, a respected NGO with a significant track record in financing and managing community development projects, and Mookodi Technologies, a 10-year old black-owned provider of healthcare products and services.
With the Kagiso Trust having been involved in various community primary healthcare projects over the past 20 years, trust director Afzal Patel said it was only natural that they partnered with a truly South African healthcare provider whose values mirrored their own.
The other empowerment partner is Kurisani Youth Development Trust, the investment arm of LoveLife, South Africa’s national HIV/Aids prevention campaign.
Kurisani was established to benefit the youth passing through LoveLife’s development and empowerment programmes, and the organisation’s youth healthcare initiatives extend deep into South Africa.
“Adcock Ingram’s partnership with us is an investment in an Aids-free motivated generation of young South Africans,” said LoveLife Trust CEO Grace Mathlape, addding that the proceeds from Kurisani’s empowerment transactions provided the long-term funding needed to sustain LoveLife and enhance its programmes.
“We are delighted to have partners of the calibre of the Kagiso Health Consortium and Kurisani, and look forward to their contribution to Adcock Ingram’s quest to add value to life,” said Louw.
Employee share scheme
As part of the transaction, 3.25% of the company’s enlarged issued share capital has been set aside for its existing and future black South African employees, who will receive the same entitlement, regardless of their seniority level within the company – which Louw described as “groundbreaking”.
“[The scheme] was designed specifically with the intention of uplifting historically disadvantaged South Africans and adheres to the latest King 3 guidelines,” he said. “A factory worker, for instance, will get the same number of shares as a senior executive.”
The transaction will be funded through a combination of unencumbered equity from the BEE partners and vendor facilitation from Adcock Ingram.
The company expects the transaction to be implemented by the end of March 2010, subject to the fulfilment of certain conditions, including approval by company shareholders.
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