Industrial holding company and multifaceted global contractor Murray & Roberts has announced a R494-million investment extending its current black economic empowerment (BEE) partnerships to a broad base of staff and community organisations.
The objective of the empowerment strategy is to achieve greater than 25% broad-based, direct black ownership in Murray & Roberts by 2010. The initiative, announced on Wednesday, will see 10% of Murray & Roberts Holdings Limited shareholding transferred to four trusts and will result in 9,4% direct black ownership being achieved by early next year.
Brian Bruce, Murray & Roberts group chief executive, commented: “This transaction is an investment in Murray & Roberts’ business strategy that has, at its core, a value system of sustainable development and value creation. It is non-negotiable for us that this empowerment initiative delivers real economic benefit from day one, is transparent and fair, supports our business strategy and contributes to the normalisation and socio-economic development of South African society.
“Murray & Roberts has a proud history over 100 years of contributing to the socio-economic development of South Africa and the region as a responsible corporate citizen, and this investment is a continuation of that heritage.”
Murray & Roberts shareholders will be required to dispose of one share for every 10 shares they hold. R272-million of the total R494-million transaction cost will be funded directly by Murray & Roberts through reference share funding with the balance in the form of interest-free loans or other appropriate funding provided by Murray & Roberts.
The first of the four proposed trusts will be a general staff trust that will receive approximately 4,9-million shares to the value of about R74-million with a minimum expected dividend payment of about R2-million a year based on the current dividend per share. The beneficiaries of the trust will be broad based and include most Murray & Roberts’ staff.
Depending on the final number of staff who are beneficiaries of the trust, the value of the shares will be in the order of R3 000 per employee.
The second trust will be a black employee benefits trust that will receive approximately 6,6-million shares valued at about R99-million with an estimated dividend payment of about R3-million a year based on the current dividend per share. The trust is a compassionate fund aimed at providing grants for housing, medical and compassionate needs of qualifying black South African employees and their immediate families.
The third trust, the community trust, will receive approximately 11,6-million shares, currently valued at about R173-million, with a minimum expected dividend payment of about R5-million a year based on the current dividend per share. The community-trust beneficiaries will be selected from select designated groups and black women’s groups by an independent panel and will be informed by Murray & Roberts’ CSI initiatives and have a particular focus on broad-based black women’s groupings.
The fourth trust will be a black executive trust that will receive approximately 9,9-million shares valued at about R148-million, to be funded by Murray & Roberts through an interest-free loan or other appropriate funding. The minimum expected dividend payment will be about R4,5-million a year based on the current dividend.
The beneficiaries of the trust will be black South Africans who are part of top, senior and middle management as per the definitions of the Employee Equity Act. The trust is an employee incentive scheme, with its objective being to enable Murray & Roberts to attract and retain top-skilled staff.
This investment in broad-based empowerment will extend the existing Murray & Roberts empowerment partnerships at the subsidiary level and around specific projects to the holding-company level, and ensures ownership in the future of Murray & Roberts by its internal stakeholders and the sharing of financial benefits with them and the community. — I-Net Bridge