Talks are still continuing between Holcim and Aveng, South Africa’s biggest construction and engineering firm, over Holcim’s plans to sell 85 per cent of its 54 per cent interest in its local cement operations to a black economic empowerment (BEE) consortium for R6.82bn.
Aveng is a 46 per cent owner of Holcim South Africa.
Richard Savage, Aveng’s chairman, told the company’s general meeting on Friday that both Aveng and Holcim remained committed to transformation and to the implementation of a sustainable BEE transaction in Holcim SA.
He said the talks were aimed at reaching a mutually acceptable outcome for Aveng, Holcim and the potential new stakeholder in Holcim SA.
In terms of the proposed transaction announced in August this year, newly founded entity AfriSam Consortium - headed by Eltie Links, the former trade negotiator and South African ambassador to the EU - will acquire a 76.5 per cent stake in AfriSam, which will own 54 per cent of Holcim SA.
Holcim will retain a 15 per cent share in AfriSam, while Aveng has been given the opportunity to obtain an 8.5 per cent stake in AfriSam.
The proposed transaction has cast Aveng as the possible deal-breaker because of its pre-emptive right to first option to acquire any shareholding that Holcim may decide to dispose of in Holcim SA.
Carl Grim, Aveng’s chief executive, admitted when the proposed transaction was announced that if Aveng exercised its pre-emptive rights in terms of its agreement with Holcim, this would clearly affect the shares Holcim intended selling to its BEE partner.
Grim said Aveng had to find the best balance between its responsibilities as a good corporate citizen and its commitment to BEE.
"We owe our shareholders diligence and intend to be diligent in looking at this offer," he said. "While we are supportive of the principle of BEE, we need to be mindful of our responsibility to shareholders and try to accommodate both at the same time."
Grim was uncertain how long it would take for Aveng’s board to decide whether it intended to exercise its pre-emptive rights, but said he would be surprised if there was any firm answer regarding the proposed deal before the end of this year.