Absa Plans $636-Million Black Empowerment Deal for Staff & Investors

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Absa, one of South Africa’s largest banks, is currently planning a $636-million (R9,4-billion) transaction which could possibly see 8% of the lender’s shares given to staff and third-party investors.

Further, Media24 reports, the transaction will enable all of Absa’s employees across the banking group’s operations to become shareholders.

“While the transaction is in development, it is currently envisaged that the scheme will hold up to 8% of the group’s issued share capital, which equates to approximately R9.4-billion, based on the group’s share price on 20 September 2021,” Absa said in a statement issued today.

This new deal, the company says, will be its second broad-based black economic empowerment (B-BBEE) transaction of major significance. Previously in 2004, Absa issued a 10% stake to Batho Bonke Capital, an empowerment consortium that, consequently, would become the bank’s second-largest shareholder.

The transaction with Batho Bonke has since dissipated, allowing the new selling of shares by beneficiaries, and Absa had committed itself to undertake a new B-BBEE transaction after its separation from Barclays to accelerate transformation within the group.

Absa says that it had planned to launch the initiative sooner but was delayed by the COVID-19 pandemic which created unfavourable market conditions.

“The intention to undertake a new B-BBEE transaction demonstrates Absa’s significant commitment to transformation,” said Jason Quinn, Absa interim group CEO.

Quinn added that “Meaningful black participation, including ownership, at all levels of the South African economy, is a national priority to ensure sustainable sociopolitical, financial and economic stability.”

Currently, the deal is expected to be implemented in 2022, with Absa saying that the proposed scheme will still be subject to shareholder and other approvals.

Absa Launches Search for Digital Partners

Earlier this month, Absa announced partnerships with HYBR and SystemicLogic in order to accelerate the bank’s search for digital partners and start-ups across Africa.

The bank is searching for firms that have innovative tech-based solutions which could ultimately be scaled and deployed to benefit its customers.

By Luis Monzon
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