• Ros Nightingale

A new B-BBEE scheme offering from SAB

MONEYWEB / 04 MAY 2021 = 00.03 / CIARAN RYAN

Extending the legacy of SAB Zenzele with the introduction of SAB Zenzele Kabili.

CIARAN RYAN: It was more than a decade ago that SAB Zenzele was launched as the country’s largest broad-based black economic empowerment scheme in the fast-moving consumer goods sector. SAB Zenzele will soon wind down. And that raises questions as to what will replace it. Duncan Pask, the SAB company secretary, joins us to talk about this. Duncan, tell us a little bit about this, it’s 10 years since SAB Zenzele was launched. Now we’re getting the wind-down stage, what’s going to happen now?

DUNCAN PASK: We’re very proud of where SAB Zenzele has taken us in the last 10 years, and the value it’s created for our employees and our retailer partners. When it finally settles in May 2021, it will have reached a total value of R9.7 billion. We are really looking to extend that legacy of SAB Zenzele and move into our new scheme, SAB Zenzele Kabili, which we will launch on the back of SAB Zenzele.

CIARAN RYAN: So, we believe you introducing a new scheme to replace the old one. Tell us about that.

DUNCAN PASK: So, SAB Zenzele Kabili will be the new BEE scheme for SAB. It will have a total value of R5.4 billion worth of AB InBev shares, [this] will be the underlying asset. And that scheme will be initially available to our existing Zenzele beneficiaries.

So we are asking our tavern owners, our bottle store owners, our general retailer customers, as well as our employees to move with us into the new transaction. And we are asking our retailers to vote on a scheme of arrangement that will go forward on the 10th of May to roll forward some of their value. And if they say yes, we will be listing SAB Zenzele Kabili on the BEE segment of the JSE on the 28th of May, which we’re very excited about.

CIARAN RYAN: So that raises the question then, who may participate in the scheme. You’ve mentioned tavern owners and bottle store owners, but who exactly can participate?

DUNCAN PASK: So, initially it will be our retailer partners, our existing retail shareholders from Zenzele who will roll some of their funds forward.

They are being asked to invest a small remaining entitlement that they have outstanding that has not been settled as yet, on an individual basis. A retailer that put in R100 in 2010 as an investment [will] have received a total value of R77 000 out of SAB Zenzele. We’ve paid them R59 000 of that already. And we’re asking them a minimum to take from their remaining R18 000 to invest R11 000 of that into Kabili. And for that investment, for every rand they put in, we will give them 50 cents in facilitated or free discounted shares and vendor funding, loan funding for a further R1.83 per rand [they] put in. For the R11 511 they put into Kabili from Zenzele – they will get a total gross exposure of around R38 000 in SAB Zenzele Kabili shares.

That’s the initial offer we’re putting forward to our retailer shareholders that we’re asking them to vote on, on the 10th of May. If they say yes, then we go ahead and we list this entity. We will include our employees in a new employee scheme as part of the R5.4 billion transaction. Our SAB foundation will also come along with us. They do entrepreneurship development and community development projects for small previously disadvantaged business owners. And once we list, we then hope to bring in the broader public. So from the 28th of May 2021, we’ll be on the JSE. And we hope the broader public [will] buy into the transaction.

We believe it’s a fantastic underlying asset that it will be holding, which is the global beer maker, the world’s largest beer maker, AB InBev, and we believe that’s a valuable offer to them.

The initial listing price will be a R40 per share. We think that’s really a fantastic opportunity for small investors to get a stake in the world’s largest beer maker, which normally trades at around a R1 000 a share.

I think the accessibility is going to be fantastic from that listing at the end of May.

CIARAN RYAN: Absolutely. And tell us what will happen to the pre-existing Zenzele shareholders?

DUNCAN PASK: So the existing Zenzele shareholders, our retailers, will vote and they’ll have the option to put in 63.5% of their remaining entitlement into Kabili. The balance of their entitlement, the 36.5% that they have left, they can then choose to top up their Kabili investment. They can take out AB InBev shares, a normal AB InBev share, in their own name, which was the originally intended settlement, or they can choose to sell the AB InBev shares that they may have for cash and we will facilitate that for them.

CIARAN RYAN: Okay. So that raises the question then what must SAB Zenzele shareholders do now?

DUNCAN PASK: So we are asking them to vote, through the various channels we have available to them at the moment. They can download the SAB Zenzele Kabili app off the Google Play Store or the Apple iStore, and they can register and vote via the app. They can vote via USSD, SMS response by dialling *120*44222# or they can wait for their sales rep to come visit them and vote via a physical proxy form, or they will receive that in the post and be able to complete it and fax or email it back to us. So we were trying to make it as easy as possible in these Covid times to vote remotely without unfortunately being able to gather together.

CIARAN RYAN: Okay, so they can download the SAB Zenzele Kabili app either on the Apple iStore or the Android store. And they’ve got until the 10th of May to vote, right?

DUNCAN PASK: They have a few more days and they’ll be able to vote on or before the 10th of May, so they can log their vote now, and they can join us at the virtual meeting, which will be broadcast on Soweto TV at 10 o’clock on the 10th of May, or they can download the app and livestream the event, free of data charges. All the charges are reversible. So SAB will be carrying the cost and they can view it free of charge or they can join our Facebook group SAB Zenzele Kabili and it will be livestreamed on Facebook live as well. So we’re covering as many channels as possible – Soweto TV, the Kabili app and Facebook.

CIARAN RYAN: Okay. And for an interested shareholder of the Zenzele Kabili scheme, what is the process from here?

DUNCAN PASK: So we look forward to the listing on the 28th of May, and that will be on the BEE segment of the JSE. And for anyone wanting to buy shares, who is a qualifying black person in terms of the BEE Act, they will be able to acquire shares through a JSE broker or any other trading platform they may already use. The big four banks offer those sort of trading platforms, or they could use an Easy Equities platform or anything they use already. Alternatively, if they don’t have an existing trading platform that they use, or access to one, they can always call us on our helpline on 0861 900 903, and we will facilitate it for them.

CIARAN RYAN: Okay. And just to repeat that number again, for people who do want more information about the scheme, you can phone 0861 900 903. Thank you very much. Duncan Pask, who is the SAB company secretary.

Brought to you by the South African Breweries (SAB).


LINK: https://www.moneyweb.co.za/news/companies-and-deals/a-new-b-bbee-scheme-offering-from-sab/

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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