Santam is set to begin implementing its R915 million broad-based black economic empowerment (BBBEE) scheme following the fulfillment of all remaining conditions precedent this week.
According to CE Steffen Gilbert, the short-term insurer is eager to finalise the process that will see 10% of its shares sold to a range of previously disadvantaged individuals, comprising qualifying Santam staff, business partners and black communities in which the group is operating.
Monday, 21 May, has been set aside as the date the scheme will be implemented, Gilbert says. This will see all existing Santam shareholders sell 10% of their Santam holdings at R82 per share to an entity set up to hold BEE interests - BEE SPV Co - which will then own 10% of the issued shares of Santam excluding those held as treasury shares by the group.
Interests in BEE SPV Co will be split between: the Santam Black Economic Empowerment Staff Trust (26%), the beneficiaries of which will be qualifying black Santam staff; the Santam Broad-Based Black Economic Empowerment Community Trust (25%), the beneficiaries of which will be various black communities; and the Santam Black Economic Empowerment Business Partners Trust (49%), the beneficiaries of which will be qualifying black strategic partners of Santam.
Gilbert says the groups non-executive directors have set up the trusts that will hold the shares on behalf of all three groups. 'However, we only expect to finalise the share allocation criteria during the fourth quarter of this year," he explains.
Currently, Santam's black employees comprise 28.6% of executive management; 9.3% of senior management; 22.2% of middle management and 28.6% of junior management.
Meanwhile, explains Gilbert, the focus of the Santam Broad-Based Black Economic Empowerment Community Trust will be to be active in the areas of welfare, healthcare, education and development; to advance community upliftment for poor and needy persons; and to promote and support BBBEE initiatives in line with Santams corporate social investment programmes.
Regarding the company's business partners that will be involved in the business partners trust, he says: "Our allocation committee will be considering as beneficiaries of the trust all black players in the insurance value chain that contribute to Santams business, including intermediaries, suppliers, policyholders and business partners."
Gilbert points out that once the scheme has been fully implemented, Santam will surpass the direct BEE ownership criteria set out in the Financial Sector Charter, which calls for 10% ownership and voting rights in the financial institution by 2010. The company already has black shareholders through parent Sanlam, which will own approximately 51% of the short-term insurer after the scheme has been implemented. The addition of the direct ownership scheme will give Santam an estimated total black ownership of 21%.
"This new BBBEE ownership scheme is but one way Santam is transforming itself. The group is in the midst of implementing even more far-reaching changes as part of its wider transformation and sustainability drives that will help it gain ground across many different aspects of empowerment," concludes Gilbert