Banking group FirstRand announced on Monday that the necessary commitments and approvals from various financial institutions for the funding of the third-party component of a proposed black economic empowerment (BEE) transaction have been secured.
This paves the way for the deal to be implemented in the first quarter of 2005.
The component in question will see broad-based empowerment groups — including the Kagiso Trust, Mineworkers Investment Trust, WDB Trust and the FirstRand Empowerment Foundation — acquiring 6,5% of FirstRand.
Black South African FirstRand staff, through staff trusts, and black non-executive directors will hold an additional 3,5% of the group. A total of 0,4% of FirstRand’s issued ordinary share capital is already held by black staff, bringing the group’s total direct black ownership to 10%.
FirstRand said the drafting of the necessary legal agreements for the funding for the third-party BEE component has started. It added that, through its subsidiary FirstRand Bank Limited, it intends to fund the FirstRand staff BEE component itself out of available resources.
“Accordingly, the BEE transaction is likely to be implemented in the first quarter of 2005. A detailed terms announcement will be published once the documentation relating to the BEE transaction and the associated third-party funding has been finalised.
“This announcement will include an analysis of the economic cost/dilution of the BEE transaction to FirstRand shareholders,” it stated. — I-Net Bridge