Barloworld re-prices BEE ownership deal

South African industrial group Barloworld is re-pricing its black ownership offer in line with a sharp fall in the value of local equity markets, it said on Tuesday, pushing its shares 5% lower.

The company said shares would now be priced at R83,31, compared to an initial price of R103,87. That will reduce the economic cost of the deal to 2,8% of the company’s market value, versus 3,2% under the original deal.

Barloworld plans to sell a 10% stake of the company to black investors as part of its drive to meet government requirements on black ownership, which are aimed at redressing the economic imbalances of apartheid.

Barloworld was severely criticised last year by the Public Investment Corporation, one of its main shareholders, for not having implemented black economic empowerment (BEE), before announcing plans to do so.

The company said on Tuesday it needed to reduce the price of shares under the deal to make it sustainable, given a sharp fall in its own stock and in those of other major South African companies.

The new price was based on a 30-day weighted average to July 9, it said, adding that cutting the price would reduce the risk of breaching the minimum share cover ratio required by funding agreements.

Shares in Barloworld slid more than 5% after the announcement and traded 4% lower at R63,84 by 1.50am GMT, lagging a firmer Johannesburg Top-40 index of blue-chip stocks. - Reuters

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