African Rainbow Capital to acquire stake in Afrimat

PATRICE Motsepe’s African Rainbow Capital is offering to buy an 18.36% stake in Afrimat through the JSE-listed company’s empowerment arm, Afrimat Empowerment Investments.

Afrimat CEO Andries van Heerden on Friday emphasised that the deal was subject to conditions, including Afrimat’s black economic empowerment (BEE) trust voting in favour of the offer.

He said African Rainbow Capital had agreed to a lock-in period of at least four years.

“We have been talking, I guess, a good three or four months,” Van Heerden said.

“Afrimat is of the view that this will create a long-term and sustainable BEE partner with certainty around shareholding, which will build further value for Afrimat,” he said.

African Rainbow Capital is owned by Ubuntu-Botho Investments, which is in turn owned by Motsepe’s family trust, along with a number of broad-based empowerment groupings and the Sanlam Ubuntu-Botho Community Development Trust.

Afrimat supplies industrial and construction materials.

Van Heerden said Afrimat had been 26% black-empowered since listing in 2006, and that black employees owned 22% of Afrimat Empowerment Investments in a trust, with private shareholders making up the remaining 4%.

He said if a deal with African Rainbow Capital was approved by the trust employees, they would retain about 4% of Afrimat. He could not disclose any deal value until the company had spoken to the workers.

But he said African Rainbow Capital would pay a discounted price for their shareholding subject to the agreement of trust members. The share is trading at about R24.

African Rainbow Capital will facilitate the settlement of all outstanding debt in relation to the Afrimat shares held by the trust and will distribute the benefits to its participants.