6 October 2010
US-based engineering and construction firm Kellogg Brown and Root has unveiled a black economic empowerment (BEE) deal under which an empowered consortium and company employees will acquire a stake of just over 25% in its South African subsidiary.
Following the transaction, which is subject to obtaining certain regulatory approvals, the Kwande-Thesele consortium will own a 19.9% share, a new employee stock ownership plan will own 5.1%, and the remainder will remain owned by KBR. The value of the deal was not disclosed.
“This sale reaffirms KBR’s and KBR South Africa’s long-term commitment to clients in South Africa,” KBR Operations executive Dennis Calton said in a statement last month.
“With some of the strongest [BEE] credentials in the industry, KBR looks forward to expanding our offerings in the region to include minerals and mining, power, pulp and paper, and infrastructure and government opportunities, while maintaining a leading position in the hydrocarbons and chemicals market.”
Proven track record
According to the statement, direct equity ownership by the Kwande-Thesele Consortium and the formation of the employee stock ownership plan will enhance KBR SA’s empowerment rating, making KBR the leading engineering and construction contractor in South Africa in this regard, with an anticipated BEE rating at Level 4 or better.
Kwande-Thesele is a consortium consisting of established South African companies and individuals that have a proven track record in their areas of business, and includes broad-based participation by women organisations.
“We are proud to partner with Kwande-Thesele on this important venture,’ said KBR South Africa MD Themba Mabuza. “We are optimistic that the enhancement of our [BEE] rating through this equity sale will yield more projects for KBR in the competitive South African environment, and we look forward to further solidifying our portfolio in the region.”
Increased employee retention is another anticipated benefit of the transaction, as the employee stock ownership plan aims to give employees a direct stake in the success of KBR SA.
The transaction also enables KBR SA to bring KBR’s broad range of high quality engineering, procurement and construction capabilities to more customers in the region.
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