Absa Group Shareholders Approve Landmark B-BBEE Transaction
Absa Group Shareholders Approve Landmark B-BBEE Transaction. Absa Group shareholders have voted in favour of the Group’s broad-based black economic empowerment (B-BBEE) transaction, valued at approximately R10 billion at recent share price values, paving the way for implementation of one of the largest black economic empowerment transactions in recent times.
At an extraordinary general meeting held 2 June 2023, following the Group’s annual general meeting, shareholders approved resolutions required to give effect to the transaction, including increasing Absa’s authorised share capital.
“We are grateful to our shareholders who are aligned to our long-term vision of empowering our staff and communities,” said Arrie Rautenbach, Absa Group CEO. “Today marks a milestone in the journey to bring this sizeable and impactful transaction to fruition, benefitting employees and communities in a meaningful way.”
The B-BBEE transaction involves 7% of the total Absa Group shareholding, comprising 3% for South African staff and 4% for black participants in selected Corporate Social Investment (CSI) progammes. Absa Group companies outside South Africa will be able to participate through a cash-settled staff scheme in their respective jurisdictions, which will contain terms and provisions that will be notionally equivalent to the terms proposed for the SA staff scheme.
Absa anticipates that the SA staff scheme will be implemented on 1 September 2023, awarding rights to shares to thousands of Absa employees, who will become shareholders when the shares vest five years from the implementation date. On implementation of the transaction, Absa will also allocate shares to a CSI Trust which will distribute its significant dividend income to its beneficiaries, who will be mainly black participants in CSI programmes that focus on education and youth employability.
Both the CSI component and the SA staff component will enhance Absa’s B-BBEE credentials and assist Absa in achieving the equity ownership targets set out in the Financial Sector Code, such that Absa can sustainably achieve at least 25% black ownership.
