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JOHANNESBURG - South African chemicals group AECI Ltd. announced plans to enhance its Broad-Based Black Economic Empowerment (B-BBEE) credentials through a new Broad-Based Ownership Scheme (B-BOS). The initiative aims to transfer a 15.5% stake in its subsidiary, AECI Mining, to the AECI Foundation, bolstering the company’s compliance with national empowerment standards.
The transaction, valued at R522 million, will see the issuance of new B Ordinary Shares to the AECI Foundation, enabling it to partake in the economic interests of AECI Mining’s South African operations. This move is in line with AECI’s strategy to meet the ownership targets outlined in both the B-BBEE Codes and the Mining Charter of 2018.
AECI Mining, recognized for its century-long history in mining solutions, will fund the Foundation’s stake through a combination of cash contributions and notional vendor financing. The Foundation, a Public Benefit Organisation, focuses on community development in areas where AECI Mining operates, emphasizing support for orphans, vulnerable children, and poverty alleviation projects.
The financial implications of the deal, which will not affect AECI Mining’s net asset value, have been audited following International Financial Reporting Standards (IFRS). While the B-BOS falls outside the scope of IFRS 2 - Share-based Payment, leading to no IFRS 2 charge in AECI’s financial statements, a fairness opinion was sought for transparency. PricewaterhouseCoopers Corporate Finance has deemed the terms of the B Ordinary Shares issuance fair for AECI shareholders.
The B-BOS Transaction (JO:TCPJ) is classified as a category 2 transaction according to the JSE Limited Listings Requirements, meaning it does not require approval from AECI shareholders. The deal is contingent on several conditions, including a B-BBEE rating review for AECI Mining and the creation of the B Ordinary Shares by the Companies and Intellectual Property Commission (CIPC).
Expected to take effect around March 20, 2025, the transaction underscores AECI’s commitment to South Africa’s empowerment objectives and its impact on local communities. This information is based on a press release statement from AECI.
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