Barloworld unveils R2.4bn BEE deal

12 June 2008

Diversified industrial group Barloworld has unveiled a R2.4-billion black economic empowerment transaction that will see 10% of the company’s shares being transferred to a strategic partner, employees and community groups.

The company said in a Securities Exchange News Service (SENS) statement this week that the initiative would see an effective black ownership of nearly 29% of the company’s South African operations, excluding mandated investments and offshore assets.

As well as employees of the company’s South African operations, black non-executive directors also stand to benefit from the deal.

In an Engineering News article this week, Barloworld CEO Clive Thomson indicated that empowerment and transformation were a key focus area for the group, and it would maintain its commitment to lead in those areas.

The company said that strategic black partners would hold 5.88% of issued share capital, the employee component – including black non-executive directors – would hold 2.39%, community service groups would hold 0.95% and an educational trust would hold 0.78% of the company’s issued share capital.

“The participants in the black ownership initiative will benefit from Barloworld’s growth locally and internationally as their shareholding is at the listed company level,” the company statement read.

Engineering News further reports that the deal would include a R1.5-billion term loan funding structure, where Barloworld provides strategic black partners and community service groups with ability to raise funding at a competitive credit margin.

“A R40.4-million equity contribution from strategic black partners (3% of investment); a R4.5-million equity contribution from community service groups (R1.5-million each); R504-million through a notional vendor facilitation structure – black managers trust and education trust; and a R245-million cash contribution through general staff trust and black non-executive directors trust,” the article says.

The company statement added that both the empowerment deal and the loan funding structure would have to be approved by the company’s shareholders, with the empowerment transaction becoming effective as of 25 August.

SAinfo reporter

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