Old Mutual will next week open its R2.8 billion Broad-based Black Economic Empowerment (B-BBEE) scheme to the public after shareholders on Friday approved the transaction.
The Old Mutual Bula Tsela Retail Scheme (pave the way in Sesotho) will sell 1.29 percent of the group’s share capital to black community beneficiaries for as little as R10 a share.
The new transformative empowerment was first announced earlier this year as an empowerment ownership scheme to enable qualifying black South Africans, including Old Mutual employees, to share in the success of the company.
The deal will see Old Mutual facilitate a share offer to individuals who don’t usually have access to these types of share schemes to invest indirectly in the Old Mutual Limited share.
At the closing of the transaction, Old Mutual’s Ownership is expected to accelerate its B-BBEE targets from the current 29 percent to exceed 30 percent black ownership.
Old Mutual chief executive Iain Williamson said yesterday that they strongly believed that this scheme had the potential to transform lives and build mutually positive futures for all involved.
“This deal underpins our firm belief that real transformation is necessary to sustain business growth and serve the best interests of all South Africans,” Williamson said.
Qualifying applicants can apply for a minimum of 200 Retail Scheme shares at a total subscription price of R2 000, payable upfront as a lump sum.
Ten percent of the retail part of the scheme will be set aside for applicants who cannot afford to pay the R2 000 upfront – they can apply for a maximum of 100 Retail Scheme shares at a total subscription price of R1 000, paying only R100 upfront and the remainder will be payable over a 12-month period.
The scheme will be opened on Monday, August 22 with the application window closing on October 24.
This transaction follows the more than R7.9bn of value created when Old Mutual’s 2005 B-BBEE deal matured in 2015.
Williamson said the group had acted fast to realign and cement its business objectives since it moved its primary listing back to South Africa in June 2018.
He said transformation was a key component of the 177-year-old insurer’s strategy and journey as a trusted partner in Africa.
“We are now firmly anchored in the continent we love, driving her growth and developing innovative solutions for her people. The reality is that consumers are stretched but many are looking for ways to save or invest for the medium-to-long-term,” Williamson said.
“It’s very important for South Africans to understand that they can invest small amounts consistently to create savings for themselves – one does not need hundreds of thousands of rand to start your savings journey.”
Meanwhile, Old Mutual’s share price traded 1.87 percent lower yesterday to R11.54 per share on the JSE.
BUSINESS REPORT