Listed transport group Putco has announced a restructuring in which it will sell its bus fleet to subsidiary Putco Services, repurchase its shares, issue new shares and raise funds in order to introduce more than 50% black equity shareholding to the group.
Unveiling details of the deal late on Friday, Putco said it has secured black economic empowerment (BEE) partners Safika Holdings and DEC investment holding company to take up an equity interest in Putco. The proposed capital restructuring of the group is designed to establish BEE participation at shareholder level at an affordable price.
In terms of the deal, Putco will sell a substantial portion of its existing unencumbered bus fleet to Putco Services for R243-million. At the same time, Putco Services will register a notarial bond over the assets to raise R101-million in cash, which will be used to repay a loan to Putco.
Subsequent to this, Putco plans to repurchase all but 100 of its ordinary shares, which will be delisted from the JSE Securities Exchange South Africa, and then issue 200-million new shares to its new BEE partners. Moss Ngoasheng, executive chairperson of Safika, will become the non-executive chairperson of Putco after the implementation of the scheme.
Putco said it has opted for the restructuring so that the company will not be excluded from participating in future transport tender deals launched by provincial governments and others on the basis of insufficient black ownership. — I-Net Bridge