Absa's planned R9.4bn empowerment deal could put shares in the hands of black staff and investors

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Absa says it is currently envisaged that the proposed B-BBEE scheme it will place up to 8% of the group's issued shares in the hands of staff and third-party investors.
Absa says it is currently envisaged that the proposed B-BBEE scheme it will place up to 8% of the group's issued shares in the hands of staff and third-party investors.
Reuters

Absa is planning a R9.4 billion empowerment transaction which might see 8% of its shares in the hands of staff and third-party investors. The banking group said the transaction will enable all Absa employees across the group's operations to become shareholders.

"While the transaction is in development, it is currently envisaged that the scheme will hold up to 8% of the group's issued share capital, which equates to approximately R9.4 billion, based on the group's share price on 20 September 2021," the group said in a statement issued on Wednesday morning.

The company said this will be its second significant broad-based black economic empowerment (B-BBEE) transaction. In 2004, Absa issued a 10% stake to Batho Bonke Capital, an empowerment consortium that consequently became the bank's second-largest shareholder. But that Batho Bonke transaction has since unwound, allowing beneficiaries to sell their shares.

But as part of its separation from Barclays, Absa committed to undertake a new B-BBEE transaction to accelerate transformation within the group. Now the group is delivering on that promise. It said the development of the proposed B-BBEE scheme was delayed by the Covid-19 impact last year as the pandemic created unfavourable market conditions.

"The intention to undertake a new B-BBEE transaction demonstrates Absa's significant commitment to transformation," said Absa interim group CEO Jason Quinn.

"Meaningful black participation, including ownership, at all levels of the South African economy, is a national priority to ensure sustainable sociopolitical, financial and economic stability," he added.

The bank said the proposed scheme will still be subject to shareholder and other approvals. The company will publish more details about it at a later stage, but envisaged that it will be implemented in 2022.

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