South African businessman and Cyril Ramaphosa's brother-in-law, Patrice Motsepe has struck a massive deal with Sanlam. The group said it will provide R2 billion to Motsepe's Ubuntu-Botho, or its subsidiaries, to execute the empowerment strategy and buy other providers that share Sanlam's vision and strategy.
On Wednesday, it was reported that Sanlam will issue a cluster of 5% shares of the financial services group's ordinary shares to Ubuntu-Botho and a new broad-based group of empowerment shareholders.
Sanlam's empowerment partner is Ubuntu-Botho Investments. Ubuntu-Botho is a financial service firm, which is involved in private equity, asset management, and insurance.
Motsepe, who owns African Rainbow Minerals, a mining company, founded Ubuntu-Botho. The billionaire also serves as Sanlam's deputy chairman.
Sanlam said this deal hopes to strengthen its position and operations in South Africa. It hopes to grow its operations in SA over time, as well as increase its economic empowerment credentials. Sanlam also wants to build its long-standing partnership with Ubuntu-Botho.
The Citizen reported that the deal will see an increase in its economic inclusion as black women and youth, as well as its South African employees, are set to benefit from their participation in 80% new shares issued. Ubuntu-Botho will participate in the remainder of the 20% shares.
This will result in an increased B-BBEE scoring. Once these shares are sold, Sanlam will be classified a Level 1 contributor. It will also increase its direct black ownership to more than 18%. Black economic ownership at Sanlam will increase to more than 35%.
Independent Online reported that issuing these new shares will also strengthen Sanlam's balance sheet. The proceeds from the transaction will be used to recover the short-term debt facilities raised when it bought the rest of Morocco-based SAHAM Finances' 53.37% shares.
Furthermore, Sanlam will provide R2 billion to Ubuntu-Botho, or its subsidiaries, to execute the empowerment strategy.
This will be done by permitting Ubuntu-Botho to obtain and interest in specific subsidiaries of the Sanlam Group. It will also facilitate Ubuntu-Botho's investments in other financial services companies that compliment Sanlam's vision and strategy.
CEO for Sanlam, Ian Kirk, said he supports the government's affirmation that businesses have to build a country, which is driven by business and innovation. He also supports the development of the South African economy, to be one that is diverse, resilient, and prosperous.
Kirk said the group is of the opinion that the benefits will outweigh the costs over time.
Do you have a story to share with us? Inbox us on our Facebook page and we could feature your story.
Donald Trump – The Smartest President Of The USA. Subscribe to Briefly Cartoons for more Animated Jokes!
To stay up to date with the latest news, download our news app on Google Play or iTunes today.