OLD MUTUAL SWEETENS ITS BEE SHARE OFFER, WITH 30 000 APPLICATIONS ALREADY RECEIVED
Londiwe Buthelezi - 30 September 2022
For R10, lucky people who have applied for Old Mutual's Bula Tsela empowerment shares will get R66 worth of value.
Gallo Images/Charles Gallo
Old Mutual has sweetened its new Bula Tsela empowerment share scheme.
For an investment of R10 per Old Mutual share, successful applicants will be able to buy R66 in shares.
30 000 applications have already been received.
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Old Mutual has just sweetened the deal for people who apply for its Bula Tsela empowerment shares.
The insurance giant announced plans to launch the R2.8 billion scheme in April to boost black ownership to more than 30%. After shareholders voted in favour of the deal, Old Mutual opened applications to the general black public in August.
The public – from its black policyholders to stokvels, black-owned businesses and any individual classified as black under the broad-based black economic empowerment (B-BBEE) – has until 24 October to finalise their applications. Together, they will own 15% of the Bula Tsela shares. The other 40% will go to the insurer's employees, and 45% will be allocated to a community trust.
Each Bula Tsela share costs R10 – but Old Mutual’s shares are currently trading at below R9.70. Accordingly, the company has sweetened the deal: it will match every R10 that Bula Tsela investors invest.
That means those who get allocated shares by late November will immediately get an additional R10 for each share, to be used towards buying shares. In addition, the company has allocated an additional R46 in value to each scheme share bought - which must be paid back later, while the initial R10 per share has to be paid in cash.
All of this means that Bula Tsela shareholders will be able to buy R66 in Old Mutual shares in November, for an initial investment of R10 per share.
Qualifying participants can buy a minimum of 200 shares for R2 000, payable upfront. Or they can buy 100 shares for R1 000, payable over 12 months.
Following the changes to the scheme, Old Mutual has limited the number of people who can get the shares to between 40 000 and 70 000 individuals.
The insurer has already received more than 30 000 applications from the members of the public, small businesses, stokvels and other qualifying groups.
Old Mutual expects to let people who have applied know whether they got shares, and how many, towards the end of November.
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’