Banking group FirstRand’s proposed black economic empowerment (BEE) deal is valued at about R7,9-billion, making it one of the country’s largest broad-based BEE transactions to date.
Releasing the final details of the proposed transaction on Thursday, which will see 10% of the group — one of South Africa’s so-called “big four” banks — placed in black hands, FirstRand said it is committed to meaningful participation by historically disadvantaged South Africans at all levels of the economy and embraced the principles embodied in the Financial Sector Charter.
“FirstRand believes that the BEE transaction underscores its commitment to achieving sustainable, broad-based BEE in our community,” the group said.
The deal comprises two components: the acquisition of 6,5% of FirstRand by the FirstRand Empowerment Trust, a trust specifically created for the benefit of the participating broad-based BEE groups, and the acquisition of 3,5% by FirstRand’s current, as well as future, black South African employees and black non-executive directors through various trusts.
FirstRand said the broad-based BEE groups who have accepted its invitation to participate in the FirstRand Empowerment Trust are the Kagiso Charitable Trust (Kagiso Trust), the Mineworkers Investment Trust (MIT), the Women’s Development Group via the WDB Trust, and the FirstRand Empowerment Foundation.
It said Kagiso Trust, MIT and the WDB Trust have long and successful track records of truly broad-based social upliftment and transformation in the South African community.
“FirstRand believes that the constituencies of the BEE trusts and the staff trusts reflect, to a significant extent, the black, and in particular rural, stakeholders in its businesses.
“A portion of the beneficial interest in the FirstRand Empowerment Trust can be held through the investment subsidiaries of Kagiso Trust, MIT and [the] WDB Trust,” it added.
The deal is being funded through a combination of vendor and third-party funding, it said. — I-Net Bridge