EPaper

Absa shareholders approve group’s BBBEE deal

Garth Theunissen

Absa Group shareholders have approved the banking group’s R10bn broad-based black economic empowerment (BBBEE) transaction, paving the way for the company to sustainably achieve at least 25% black ownership.

At an extraordinary general meeting held on June 2, after Absa’s AGM, shareholders voted in favour of resolutions needed to give effect to the transaction, including increasing the group’s authorised share capital.

“We are grateful to our shareholders who are aligned to our long-term vision of empowering our staff and communities,” said Arrie Rautenbach, Absa Group CEO.

“Today marks a milestone in the journey to bring this sizeable and impactful transaction to fruition, benefiting employees and communities in a meaningful way.”

The BBBEE transaction involves 7% of the total Absa Group shareholding, comprising 3% for SA employees and 4% for black participants in selected corporate social investment (CSI) programmes.

Absa Group companies outside SA’s borders will be able to participate through a cash-settled staff scheme in their respective jurisdictions, which will contain terms and provisions that will be notionally equivalent to the terms proposed for the SA staff scheme.

The SA staff scheme is scheduled for implementation on September 1.

This will see thousands of Absa employees awarded rights to shares that will vest five years after the implementation date.

On implementation of the transaction, Absa will also allocate shares to a CSI trust which will distribute its dividend income to its beneficiaries, who will be mainly black participants in CSI programmes that focus on education and youth employability.

Both the CSI component and the SA staff component will enhance Absa’s BBBEE credentials and assist the banking group in achieving the equity ownership targets set out in the Financial Sector Code, with the goal of enabling Absa to achieve 25% black ownership.

The CSI trust will hold an effective indirect 4% interest in Absa and will house a CSI scheme focused on education and youth employability.

The SA staff scheme will encompass the approximate 26,000 eligible permanent local staff of the group regardless of race or nationality.

However, the SA staff scheme will be structured to enhance the participation of the approximately 20,500 eligible African, Indian and Coloured staff members in SA who will receive an additional 20% allocation relative to white staff.

The upshot is that approximately 82% of the SA staff scheme will be for the benefit of African, Indian and Coloured staff.

The staff scheme outside SA will recognise the roughly 9,000 permanent staff members outside the country who will participate via cash-settled schemes in their respective jurisdictions.

These schemes, which will be notionally equivalent to the SA staff scheme, remain subject to the approval of the respective boards of the non-SA subsidiaries and any other relevant approvals required.

TODAY MARKS A MILESTONE IN THE JOURNEY TO BRING THIS SIZEABLE AND IMPACTFUL TRANSACTION TO FRUITION

Arrie Rautenbach CEO, Absa Group

COMPANIES & MARKETS

en-za

2023-06-06T07:00:00.0000000Z

2023-06-06T07:00:00.0000000Z

https://bdmobileapp.pressreader.com/article/281784223485519

Arena Holdings PTY