As a responsible corporate citizen, Barloworld is supportive of South Africa's efforts to transform the racial profile of the economy.
The highlights of it new (Broad-Based Black Economic Empowerment (BBBEE) implementation includes:
- Creation of a long-term sustainable B-BBEE transaction
- Contribute to the transformation and inclusive growth in the South African economy
- The creation of a broad-based foundation issued with 3% of the company, which will focus on poverty alleviation, education and youth development
- Broad-based participation of 14 000 employees and an offer to the black public
- The R2.7 billion sale of a property portfolio to a black-owned and controlled company is aligned with the strategic focus of unlocking value in all assets
- Foundation shareholding evergreen and Propco empowerment period is 15 years
- The increased B-BBEE ownership will protect and grow market leading positions of South African operations
- B-BBEE ownership of 14%, while limiting dilution to shareholders
Shareholders are advised that the company has entered into agreements aimed at implementing transformative Broad-Based Black Economic Empowerment which encompasses:
- The specific issue of 6 578 121 ordinary shares of R0.05 each, which will, following their issue, constitute 3% of the entire issued share capital, to the Barloworld Empowerment Foundation at Par Value, in terms of paragraph 5.51 of the JSE Limited Listings Requirements
- The specific repurchase by Barloworld of the Foundation Shares at Par Value in the event of a breach of any of the material obligations of the B-BBEE Transaction agreements by the Foundation, in terms of paragraph 5.69(b) of the JSE Listings Requirements
- The sale by Barloworld of certain immovable properties to Main Street 1646 Limited, a majority black-owned and controlled company, for a consideration of R2.722 billion; and
- The provision of financial assistance to related and inter-related parties in terms of the Companies Act, 2008
Rationale for the B-BBEE transaction
Barloworld is committed to improving its B-BBEE status. All South African business units require an improvement of their black ownership to remain relevant and competitive.
As a responsible corporate citizen, the company is supportive of South Africa's efforts to transform the racial profile of the economy.
It intends to conclude the B-BBEE Transaction which includes its staff, communities and the broader black public as participants.
The proposed B-BBEE Transaction meets the following key objectives for Barloworld:
- Long term: The Sale of the Properties will confer Black Economic Empowerment (BEE) ownership points to Barloworld in terms of the BEE Codes of Good Practice gazetted under section 9 of the B-BBEE Act, 2003
- In addition, the Foundation is contractually precluded from selling its Shares in Barloworld without the consent of Barloworld;
Broad-based participation: inclusion of all employees, black public and the Foundation whose mandate will be poverty alleviation, education and youth development and advocacy; and
Sustainable: The Properties ensure predictability of cash flows and the Specific Issue of Shares to the Foundation at Par Value, will ensure that the B-BBEE Transaction creates a permanent empowerment legacy.
The B-BBEE Transaction will confer B-BBEE ownership to Barloworld equivalent to 14% in terms of the BEE Codes, which will increase B-BBEE ownership to 48% (excluding mandated investments) while limiting dilution to Shareholders to only 3%.
The Barloworld internal restructure
Certain of the Properties are currently owned by subsidiaries of Barloworld and other parties.
Pursuant to the B-BBEE Transaction and prior to the Implementation Date, the Initial Sellers will sell and transfer certain of the Properties to the company.
Pursuant to the internal restructure, the company (as lessor) will conclude 10-year lease agreements with Barloworld Logistics Africa Barloworld South Africa.
The Barloworld Internal Restructure does not require Shareholder approval.