The board of JSE-listed technology group Altron has resolved to form an ICT skills-focused education trust called Ascent as part of a new black economic empowerment transaction.
The broad-based BEE transaction will see funding provided to “qualifying employees’ relatives and other stakeholders within the Altron ecosystem, giving them access to ICT-related education opportunities to address the increasing scarcity of ICT skills in South Africa”.
Altron said in a statement to shareholders, issued via the JSE, that the transaction has been structured to:
- Create a sustainable funding structure that is not solely reliant on external bank funding, share price appreciation or dividend payments;
- Ensure Altron’s South African subsidiaries maintain their current broad-based BEE rating and achieve full points on the BEE ownership scorecard with black ownership (together with other existing initiatives) exceeding 30%; and
- Complement the group’s existing B-BBEE initiatives.
To achieve all of this, Altron has created a new broad-based trust to act as the new B-BBEE partner to the transaction. “The purpose of the trust is to align Altron Group’s transformation and empowerment objectives with the objectives and B-BBEE legislation requirements,” it said.
Altron TMT Holdings, a wholly owned subsidiary of the group, is the founder of the trust, whose trustees will be at least 50% independent, at least 50% black and at least 25% black female.
“Trustees and the chairperson will be independent and will not have a casting vote. The principal objectives of the trust will be to facilitate and promote the B-BBEE ownership of the Altron Group and increase access to education opportunities to address scarce ICT skills in South Africa,” Altron said.
“The benefits of the transaction will accrue in the form of distributions to the qualifying trust beneficiaries, with eligibility determined with reference to a household income of less than R600 000/year,” it added.
As part of the transaction, the trust will “obtain” a 20% ordinary share interest, through its wholly owned subsidiary Altron Foundation Holdings, in a newly incorporated entity called Altron South Africa Holdings (HoldCo), which will hold 100% of Altron TMT SA Group. Altron Foundation Holdings will indirectly hold a 20% interest in TMT SA. Altron TMT Holdings will hold the remaining 80% in HoldCo and its subsidiaries.
Further to this:
- Altron TMT Holdings (being the sole shareholder of TMT SA) will dispose of its shares in TMT SA to HoldCo in exchange for cumulative, non-participating, redeemable preference shares in HoldCo, equal to the full market value of TMT SA.
- The intra-group transaction will allow Altron Foundation Holdings to acquire HoldCo ordinary shares at nominal value and without the need to raise acquisition funding and provide it with immediate ownership in HoldCo and indirectly all the assets and subsidiaries of HoldCo.
- The preference shares will carry a preferred return at a spread to the prime lending rate.
Altron expects the transaction to become effective later this month.
“Businesses like ours can help tackle the very real problem of rising youth unemployment by bridging the skills gap and empowering young people for future jobs,” said Altron Group CEO Werner Kapp in a statement. – © 2024 NewsCentral Media
