Listed financial-services group Sanlam on Tuesday announced the introduction of a 25% black economic empowerment (BEE) shareholder, Vukile BEEShareCo, into Vukile Property Fund.
The R439-million investment by BEEShareCo is an industry first for a property fund of this size, as the transaction results in Vukile immediately achieving its five-year BEE equity target.
Proposed shareholders of Vukile BEEShareCo are Buhlobo consortium with 40%, which is led by Mlungisi Hlongwane; an additional BEE partner with 12%; and a broad-based participation trust with a 24% holding. Sanlam will retain 24%.
The trust is obligated to distribute linked units to additional BEE investors and all interim benefits from the transaction will accrue to the participation trust, Sanlam said, while discussions are still under way with the additional 12% BEE partner.
In terms of the transaction, Sanlam Life in September agreed to sell 67,4-million of its Vukile linked units to BEEShareCo for 640 cents per unit, or a total of R431,4-million.
The sale of the linked units reduces Sanlam Life’s holding in Vukile to 33%. To facilitate the transaction, Sanlam Limited has provided financial support in the form of a guarantee for R140-million, with Nedbank Corporate funding the transaction via a loan of R439-million.
“The introduction of a significant BEE equity shareholder into Vukile represents our firm commitment to meaningful transformation and broad-based empowerment within the property sector,” said Sanlam Group CEO Johan van Zyl.
“Sanlam will continue to hold a meaningful stake in Vukile, allowing our policy- and shareholders to fully participate in the changing financial-services landscape and benefit from Vukile’s empowered credentials.”
Sanlam Properties MD Banus van der Walt said the firm, in due course, expects to announce further empowerment deals in a bid to broaden its BEE shareholder base.
Sanlam was last quoted at R16,40 — up 40 cents or 2,5% — while Vukile was unchanged from its Monday’s close of R8,11 per share on the JSE. — I-Net Bridge