French construction materials group Lafarge said on Friday that it had concluded the R1,1-billion broad-based socio economic empowerment deal, that resulted in the sale of 26% of its South African mining business to its employees and Sinako, a women-led empowerment consortium.
Lafarge Mining incorporates Aggregates, Gypsum & Limestone quarrying and Lafarge Industries incorporates Cement, Gypsum-Plasterboard and ReadyMix Concrete manufacturing.
With the conclusion of this transaction, the empowerment consortium, Sinako now holds 75% of the empowerment stake while Lafarge’s historically-disadvantaged employees hold 25% of the empowerment stake through an employee share ownership trust.
The two joint lead partners, Peotona and Motjoli Resources hold 40% of Sinako, while a broad-based independent education trust and community trust hold respectively 53% and 7% of the ordinary shares of Sinako.
The Sinako transaction was funded predominantly through bank funding provided by Nedbank Limited, a financial contribution from Peotona and Motjoli and the balance through a meaningful vendor-funding package. The funding structure involved Sinako issuing redeemable preference shares to Nedbank and Lafarge on very competitive terms with respect to both tenure and pricing. In line with industry norms, the employee stake of 25% was fully vendor funded.
Peotona is a 100% women-owned investment company, with Cheryl Carolus, Wendy Lucas-Bull, Thandi Orleyn and Dolly Mokgatle as its principle shareholders. Motjoli is a 100% black-owned mining company with Nchakha Moloi and Nonkqubela Mazwai as its principle shareholders.
“We believe the conclusion of this transaction will contribute to the overall transformation of the building materials sector and in particular of the cement industry in South Africa,” said Lafarge South Africa’s executive director for strategy and development Jimmy Shiganga Over the last four years, Lafarge has raised its quota of historically-disadvantaged managers from 2% to over 30%, while 70% of its current workforce of 2 000 fell into this category.