Contract service provider Contract Services Group Holdings, or CSG, has announced that AfriGem Investments will subscribe for 8.3% or 41 million of CSG’s shares – only a day after moving from the AltX to the main board of the JSE.
This transaction will provide CSG with BEE shareholding in excess of 30%.
AfriGem, a wholly owned subsidiary of fully black owned and controlled investment company African Rainbow Capital (ARC), has a 99% broad-based black ownership, and will pay R1.18 per share for a total consideration of R48.3 million.
The issue price is equal to the 30-day volume weighted average trading price of the company for the 30 day trading period ending on 6 October 2016, with a 15% discount.
CSG provides a wide range of services including staffing solutions, facilities management, industrial, mining and related services in Southern Africa to an array of mostly blue-chip clients.
CSG CEO Pieter Dry believes the cash injection will bolster its reserves, allowing the group to continue its strategy of expanding – through making acquisitions – into a leading brand in all of its specialist outsourcing sectors, without diluting its BEE shareholding.
CSG will choose segments with medium capital intensity and higher barriers to entry than in its current businesses, while offering a full range of quality services domestically and across Africa.
Dry added that CSG will maintain its focus on the management of people and employee-intensive outsourcing solutions, while incorporating technology in industries the company knows well.
Various potential acquisitions are currently being assessed.
CSG shareholders will vote to approve the transaction at a general meeting on 13 January 2017. A circular containing the full details will be distributed to the shareholders around 30 November 2016.