JOHANNESBURG, December 13 – Sanlam said its shareholders had approved a package of strategic empowerment transactions that included issuing five percent of its enlarged issued ordinary shares to a new broad-based group of empowerment shareholders and Ubuntu-Botho.
In October, the financial services group and insurer said it planned to provide a R2 billion facility to its black-economic empowerment partner, Ubuntu-Botho or its subsidiaries, to support the execution of Sanlam’s empowerment strategy to be a diversified pan-African financial services group.
Ian Kirk, group chief executive, said this was a very strong vote of confidence that would enable Sanlam management to forge ahead with the implementation of the transactions.
“We believe these will be good for the company and for the country, enhancing our empowerment status and our long-term growth and sustainability while we continue to contribute to South Africa’s shared prosperity,” Kirk said.
“The board also took note of certain governance concerns raised in today’s climate of heightened governance standards and transparency and will continue to engage and improve on this as we continue to drive our strategy.”
The proposed share transfer transactions would increase economic inclusion as new broad-based beneficiary groups – focused on black women and youth as well as Sanlam’s South African employees – would participate in 80 percent of the new shares to be issued while Ubuntu-Botho would participate in the remaining 20 percent.
As a result, Sanlam would increase its B-BBEE scoring to be a Level 1 contributor and would increase direct black ownership in Sanlam to over 18 percent; black economic ownership would be increased to over 35 percent. As measured in terms of the Financial Sector Code, this placed Sanlam in a strong position in terms of empowerment.
Ubuntu-Botho Investments is Sanlam’s empowerment partner and a financial services firm involved in asset management, private equity and insurance. It currently holds about 14.5 percent of Sanlam’s issued shares, currently valued at about R17 billion.
Ubuntu-Botho was founded by billionaire businessman Patrice Motsepe, who serves as deputy chairman of Sanlam and also owns black-owned financial services company, African Rainbow Capital.
The empowerment strategy would be achieved by enabling Ubuntu-Botho to acquire, directly or indirectly, an interest in specific operating subsidiaries of the Sanlam Group and would also facilitate investment by Ubuntu-Botho in financial services companies that complement the broader Sanlam Group’s vision and strategy.
Sanlam, or any of its wholly-owned subsidiaries, would also acquire a 25 percent stake in African Rainbow Capital financial services, which would assist it in the execution of its South African strategy.
Sanlam said further details on the implementation of the transactions would be announced next year.