South African cement maker Pretoria Portland Cement is to sell a 6.5 percent stake to its staff and black investors in a deal worth about $133.4 million, to meet the country’s affirmative action rules.
PPC said the deal – the second in four years – would take shareholding by black investors in its domestic operations to 26 percent and enable it meet the rules set out by the government.
Companies in South Africa have to meet quotas on black ownership, employment and procurement as part of a government drive to shift more of the mostly white-controlled economy into the hands of the black majority.
Johannesburg-based PPC said on Thursday it would cancel about 20 million treasury shares it bought back to help counter the dilutive effect of the new 39.3 million shares to be issued for the transaction.
The company’s 2,400 South African employees will be issued 68 percent of the new shares and existing and new women groups would take up the rest.
The transaction value of about 1.1 billion rand is based on the 30-day volume-weighted average price of PPC shares of 27.39 rand per share as of Monday, July 9.
Reuters
