Mvelaphanga Group Limted
 
   
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Mvelaphanda Group is South Africa’s leading black-owned, managed and
controlled diversified industrial group.The Group’s ongoing development
as a black-owned corporation takes cognisance of its responsibilities as
a result of the legislative requirements contained in the BEE charters being
implemented throughout South African industry, as well as the Group’
communities in which it operates.
 
 

Equity Ownership

The major shareholders in Mvelaphanda Group comprise Mvelaphanda Holdings, the BEE trusts, large financial institutions, asset managers in South Africa and overseas, pension funds, public investment bodies and the general public.

Regular presentations are made to institutional shareholders and other members of the investment community, particularly following the publication of the Group’s interim and year -end financial results, and as might otherwise be required in the context of corporate actions or other developments within the Group.

On 19 June 2007, Mvelaphanda Group implemented a broad-based BEE ownership initiative to secure Mvelaphanda Group’s black shareholding in the medium term. In terms of the BEE transaction, 124 425 055 redeemable option-holding shares were issued, in equal proportions, to the BEE trusts.

The BEE options attached to the BEE shares allow each BEE shareholder to subscribe for one Mvelaphanda Group ordinary share for every BEE share held at a minimum strike price of R17,50. The Mvelaphanda Group ordinary shares to be issued pursuant to the exercise of the BEE options will represent 20% of Mvelaphanda Group’s current fully diluted issued ordinary share capital, calculated on the basis that all of the Mvelaphanda Group preference shares are converted into Mvelaphanda Group ordinary shares in accordance with their terms, and that all of the BEE options are exercised.

Each BEE share ranks pari passu with a Mvelaphanda Group ordinary share in terms of notices and voting (other than in respect of certain restrictions imposed by the JSE). The trustees of the BEE trusts will exercise the votes relating to the BEE shares in meetings of Mvelaphanda Group shareholders. Pursuant to the issue of the BEE shares, 20% (calculated on a fully diluted basis as set out above) of Mvelaphanda Group’s issued share capital is held and voted (subject to certain restrictions imposed by the JSE) by the BEE trusts, the beneficiaries of which represent a broad base of BEE individuals and organisations.

As a result of the restrictions relating to the sale and/or transferability of the BEE shares, the BEE shares and the ordinary shares to be issued pursuant to the exercise of the BEE options will continue to be held by the BEE trusts, and/or eligible key individuals, and/or eligible BEE companies at least until 31 December 2014.


The BEE transaction has achieved the following objectives:

  • securing Mvelaphanda Group’s BEE shareholding as a competitive advantage in attracting BEE deal flow, acting as a consolidator of BEE transactions and participating in the “secondary trade” in BEE transactions;
  • ensuring that the level of Mvelaphanda Group’s BEE shareholding is maintained above 50% in the short to medium term, in line with the requirements of certain of Mvelaphanda Group’s investments mandates;
  • minimising the impact of the dilution of Mvelaphanda Group’s BEE credentials as a result of the conversion of the Mvelaphanda Group preference shares into Mvelaphanda Group ordinary shares;
  • maximising the BBBEE scorecard points achieved by Mvelaphanda Group for equity ownership in terms of the BEE Codes; facilitating further participation in Mvelaphanda Group’s share capital by broad-based BEE participants; and
  • allowing employees and management of the Group to become shareholders in Mvelaphanda Group and participate in the anticipated continued growth of Mvelaphanda Group.

The profile of the beneficiaries of the BEE trusts demonstrates Mvelaphanda Group’s commitment to ensuring that grassroots communities benefit from its assets and investments and reflects a broad-base of historically disadvantaged South Africans, including women’s groups and broad-based non-profit, community-orientated and charitable organisations.

Mvelaphanda Group believes that these organisations can improve their income by participating directly in the investment and other opportunities obtained by Mvelaphanda Group. In this manner these organisations and the communities they serve to benefit directly from the investment gains achieved by Mvelaphanda Group, rather than only from the charitable donations which may be made to them from time to time. This direct participation improves the sustainability of these organisations and should provide greater benefits than if they were solely dependent on donations.