28 August 2008
South African cement manufacturer PPC has unveiled a broad-based black economic empowerment transaction that will see a 15% stake in the company, presently valued at R2.7-billion, being transferred to a broad range of black shareholders.
Those who stand to benefit from the transaction include company employees, an educational trust, a construction industry association trust, two community service groups, and strategic black partners.
“Today heralds a significant achievement by the company as it reaches a key empowerment objective at the equity level,” PPC chief executive John Gomersall said in a statement this week.
“We set out to ensure that the structure of the deal was as broad-based as possible, benefiting mainly black South African stakeholders.”
Education and training
A Construction Industry Associations Trust has been established to benefit existing and new black construction industry and related associations. The income of the trust will be allocated to specific projects which benefit previously disadvantaged individuals who are members of these associations.
Furthermore, an external trust has been established to develop skills and provide benefits to primarily black individuals with educational and skills needs in the cement, lime and aggregates manufacturing, mining, construction and related industries.
PPC internal trusts for employees, black managers and a small allocation to non-executive directors will be created to reward them for their years of creating value for the shareholders. Another internal trust will be established to provide benefits to the families of PPC employees.
“At least 85% of the benefits from both external and internal trusts will be allocated to black people,” the statement read.
The two community services groups taking part in the transaction are the Shalamuka Foundation and the Disability Empowerment Concerns Trust, who have together contributed R5.4-million of their own equity.
The Shalamuka Foundation was formed in 2006 to raise long-term sustainable funding for the highly regarded Penreach programme, which provides teacher skills workshops to about 2 200 school teachers in 900 schools.
The Disability Empowerment Concerns Trust was established in 1996 by organisations representing people with disabilities. Their activities touch over 2-million people of whom more than 85% are black.
The four strategic black partners taking part in the transaction are Nozala, Peu, the iLima Portland Consortium and the Capital Edge Cement Consortium.
“The strategic black partners were chosen because of their experience and involvement in the wider construction and mining arena and their ability to add value to PPC,” the statement read. “Most of them have broad-based black components such as ‘black women’ and ‘youth’ among their stakeholders.”
According to the statement, PPC’s objective in pursuing the transaction is to ensure that its South African businesses achieve a Level 4 empowerment rating in terms of the BBBEE Codes of Best Practice by 2009.
“Empowerment and transformation is at the heart of PPC and this is a significant stride towards broad-based equity ownership,” said Gomersall. “Today is not the end of a process but the dawn of a new chapter in PPC’s 116 year history.”
This transaction is subject to the approval of shareholders at a general and a scheme meeting anticipated to be held on 11 November, while the effective date of the BEE transaction is expected to be on or about 15 December.
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