JSE building materials supplier Afrimat Limited, which recently informed investors of an upswing in prospects since year-end in February 2009, yesterday announced an empowerment transaction benefitting not only the group and its stakeholders, but 82% of its workforce who could benefit under the Afrimat BEE Trust.

Afrimat will:

  • achieve the 26% black ownership threshold demanded by the Mining Charter well in advance of the 2014 deadline;
  • retain existing, and enable the grant of new mining rights critical to the group's success;
  • retain and reward key black staff. They will be enabled to accumulate a shareholding in the company, which will align their interests with those of the company's shareholders.

Making the transaction a 'win-win' for all stakeholders, Afrimat has ensured the least possible dilutionary impact on existing stakeholders by repurchasing its own shares (1 732 538 shares repurchased to date with more to follow as surplus cash becomes available).

The Trust, through a wholly-owned entity, will acquire 22,7 million Afrimat ordinary shares as follows:

  • 13,2 million ordinary shares will be acquired from existing BEE shareholders for a consideration of R35,9 million; and
  • 9,5 million new Afrimat shares will be subscribed for at a consideration of
    R27,1 million.

To facilitate the transaction Afrimat will subscribe for 1000 Redeemable Cumulative Participating Preference Shares* in the Trust's wholly-owned entity at a subscription price of R64 million.

* the Preference Shares will carry a coupon equivalent to 70% of the prime lending rate