Huge BEE windfall awaits Wiphold from Distell

Distell’s black economic empowerment (BEE) deal has paid out more than R600-million after tax to about 4 000 employees in a development that also unveils a huge windfall awaiting the Women Investment Portfolio Holdings (Wiphold).

The JSE listed wines and spirits specialist, Distell, announced this week that this BEE windfall was included in the employees’ February remuneration.

Distell Managing Director, Richard Rushton “This is a proud moment for all of us at Distell. The continuing success of Distell is down to the loyalty, commitment and sheer hard work of our employees and it is pleasing that such a broad group of employees have benefited directly from the value that has been created since the signing of the BEE transaction”.

It is part of the 2005 BEE deal which transferred 15% of Distell’s operating subsidiary, South African Distilleries and Wines, to a broad based consortium. The consortium included the Women Investment Portfolio Holdings (Wiphold). Distell structure

The 2005 deal was valued at about R860m. Distell’s employee trust was allocated 45% share of the deal. Wiphold got 40% and Distell’s Corporate Social Investment (CSI) trust got 15%.

No cash changed hands at the inception of the deal. The BEE partners were awarded an option to claim their shares after eight years. The eight years lapsed at the end of 2013. A small tweak on the terms of the deal allows the BEE partners to exercise the option over the next two years.

While the deal was done at the level of South African Distilleries and Wines, a subsidiary of JSE listed Distell, it was made to track Distell shares. The shares held were designed to convert into Distell shares at maturity. Distell shares were trading around R30 per share when the deal was done in 2005. Now they are trading at R130 per share.

Rushton said such broad-based wealth creation embodied Distell’s on-going efforts to deliver meaningful impact to both employees and the communities in which the company operates.

“Our BEE approach goes beyond just empowering a handful of people.”

Distell noted that as a result of the restructuring of the BEE deal, the CSI Trust deed has been amended to ensure that the company complies with the requirements of a broad-based ownership scheme in terms of the BEE Codes. The CSI Trust has now been renamed the Distell Development Trust and its mandate will now be widened to incorporate more social development initiatives that will uplift the lives of more South Africans.

Through the CSI Trust, Distell will still be able to retain a satisfactory ownership rating.

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