Business Day

Bank employees to benefit from BEE transactio­n

• Empowermen­t deal sees 7% of company ’ s shares in the hands of staff and community beneficiar­ies

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In March 2023, Absa announced the implementa­tion of an R11.2bn broad-based black economic empowermen­t deal. The transactio­n took more than five years to structure and implement and represents the final element of Absa’s transforma­tion following Barclays ’ exit as a shareholde­r in 2017.

In naming the scheme eKhaya, meaning “home” in Zulu, Absa captured the opportunit­y that has been created for each colleague to own a portion of the Absa home.

The transactio­n entails the issuance of 5.5% newly issued shares, and ultimately amounts to a 7% shareholdi­ng allocated to staff and community beneficiar­ies as follows:

● A 4% evergreen corporate social investment (CSI) component, which will benefit primary black beneficiar­ies of selected education and youth employabil­ity programmes in SA;

● A vesting staff element, which benefits all eligible permanent employees:

* All of Absa’s about 26,000 eligible employees in SA, irrespecti­ve of race, background or seniority, will participat­e in a 3% equity settled staff scheme. Black employees will receive an additional 20% allocation — reflecting just over 82% of the value of the staff trust. All staff in the 3% component will receive an annual dividend equal to 25% of the dividend per share paid by Absa Group. The shares will vest after a five-year period.

* Staff employed by Absa’s subsidiari­es in all other African countries and internatio­nal operations, of which there are 14, will participat­e equally in a cash-equivalent staff scheme, equivalent to about 1% of the Absa Group’s market capitalisa­tion.

The 7% or 62.6-million Absa shares include the existing 16-million held by the Staff Trust via a special purpose vehicle, Newshelf 1405. A portion of these shares were received from the Barclays separation, and 46.6-million new Absa ordinary shares were issued to the SPV at an issue price of R178.11, valued at R8.3bn.

The transactio­n will directly impact about 35,000 people employed by Absa, and impact a broader constituen­cy across SA through the CSI Trust. The transactio­n is expected to exceed the 25% threshold set out in the Financial Sector Charter.

 ?? ?? (L-R) Arie Maree (Ansarada), Molefi Nthoba and Jan-Hendrik du Plessis (Absa), Ling-Ling Mothapo (Exxaro), Mark Antoncich and Jason Janse van Vuuren (Absa).
(L-R) Arie Maree (Ansarada), Molefi Nthoba and Jan-Hendrik du Plessis (Absa), Ling-Ling Mothapo (Exxaro), Mark Antoncich and Jason Janse van Vuuren (Absa).

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