Absa’s black economic empowerment (BEE) equity partner Batho Bonke is exiting the bank which will live the banking group relatively naked in black ownership terms.
The empowerment group led by Mvelaphanda Group, an entity founded by Tokyo Sexwale, has indicated that it was in the process of disposing its 3.4% Absa stake after the BEE deal reached maturity in March last year.
Batho Bonke director Yolanda Cuba was quoted by Reuters saying “Batho Bonke is in the process of disposing its shares”.
The Batho Bonke/Bonke Absa transaction was done in 2004 and promised to transfer 10% of the banking group’s shares to the empowerment consortium. The stake has been diluted after the consortium paid off debt used to acquire the shares. The question in many people’s minds will be what does this mean for Absa’s black ownership points. Should the bank do another deal?
In a statement issued yesterday Absa said its eight years old BEE transaction has been a success, “unlocking a substantial amount of financial benefits for a broad base of participants including community trusts, women’s groups, BEE companies, stokvels, small and medium businesses as well as historically disadvantaged individuals across South Africa’s nine provinces”.
Absa Group CE Maria Ramos said the deal has benefited both Absa and the Batho Bonke empowerment partners. “Absa was among the first financial services companies to implement a BEE deal. This has created value for Absa and broad based historically disadvantaged individuals and groups. We’d like to thank Batho Bonke for their contribution. We look forward to continuing our contribution to the transformation of the country.”