The participants will subscribe for 28.67 million ordinary shares or 13.53% of the enlarged issued share capital of Pioneer Foods at market-related prices. The total value of the transaction is about R1.67bn, based on a 30-day volume weighted average share price of R60.10 as at December 2 2011.
The shares will be locked in for a period of seven years from issue and will result in a cash contribution to Pioneer Foods of about R565m, with a further R469m plus preference share dividends accruing to the company at the maturity of the transaction seven years from issue.
This second phase follows the successful implementation of the first in 2006, in terms of which Pioneer Foods issued 10% of its then issued share capital to a BEE trust for the benefit of black employees.
To date, Pioneer Foods has paid more than R17m in dividends to the beneficiaries of the BEE trust, and a further R49.8m to beneficiaries who have since left the employment of Pioneer Foods.
The effective black shareholding in the company before phase two is 4.73% of the current issued share capital.
Andre Hanekom, group managing director of Pioneer Foods, said: "With phase two we propose to strengthen and broaden the direct black ownership of Pioneer Foods, with a representative range of black entities working in a diverse range of communities that benefit the growth and development of our company and our corporate social commitments."
The Pioneer Foods Education and Community Trust, a broad-based ownership scheme in terms of BEE codes, will subscribe for 10.59 million ordinary shares, being 5% of the enlarged issued share capital. A range of strategic black partners will subscribe for a total of 17.48 million shares or 8.25% of the enlarged issued share capital.