FANews
FANews
RELATED CATEGORIES

Successful refinancing of FirstRand's BEE transaction sees R4 billion in value attributable to BEE beneficiaries

18 May 2010 FirstRand

FirstRand Limited (FirstRand) and the FirstRand Empowerment Trust (FRET) today confirmed that the refinancing package relating to the BEE transaction concluded in 2005 has now been successfully implemented. The completed refinancing package comprises the repayment of approximately R3.37 billion of existing funding as well as the funding of transaction costs for the refinancing and a distribution of R200 million to FRET’s BEE beneficiaries. The payments above were made from new senior funding of R1,537 million, new mezzanine funding of R444 million and proceeds of R1,668 million from the placement of a portion of FRET’s FirstRand and Discovery shares (announced 8th April 2010).

Commenting on the refinancing, Sizwe Nxasana CEO of FirstRand Limited said:

“We are very pleased to conclude this refinancing. Given the recent volatile market conditions we believe that this refinance package is an excellent result for both FRET and FirstRand.

“FirstRand’s BEE transaction can be considered a highly successful partnership between FirstRand, Kagiso Trust, Kagiso Trust Investments, the Mineworkers Investment Company and Trust and the WDB Group. The net value attributable to the BEE beneficiaries increased to more than R4 billion over the last 5 years. As part of this refinancing, the broad based group of BEE beneficiaries have realised R200 million. This is a very exciting outcome as FirstRand’s BEE deal was always designed to be a truly broad-based transaction which would deliver significant real benefits to its BEE partners.”

Khotso Schoeman, a Trustee of FRET and representative of Kagiso Trust, commented that the BEE Partners were particularly pleased with the success of the refinancing.

“This has enabled FRET to realise proceeds from the sale of FirstRand and Discovery shares and to repay a significant portion of the mezzanine funding currently in place in the funding structure”, he said. “By optimising pricing and reducing costs the funding structure is de-risked and the sustainability of the entire BEE transaction is significantly increased. This will ultimately enhance the economic benefits for the beneficiaries for the remaining term of the BEE transaction, whilst enabling FRET to retain a significant shareholding in FirstRand.”

The following 6 institutions participated in the refinancing transaction: China Construction Bank (CCB), Investec Asset Management, Investec Bank Limited, Libfin , Sanlam Capital Markets and Stanlib. CCB took the largest portion of the senior funding.

Last year FirstRand announced a strategic co-operation agreement with CCB, focused on growth opportunities in the African continent. Nxasana said he was very happy with CCB as an anchor funder as it underscored the level of commitment by China’s second largest bank to South Africa and FirstRand.

Quick Polls

QUESTION

South Africa went to Davos to pitch itself as an investor-friendly destination, then signed an Expropriation Act. What message does this send to global investors?

ANSWER

Invest at your peril
SA is open for business
Two steps forward, one land grab back
Welcome to Hotel California
fanews magazine
FAnews February 2025 Get the latest issue of FAnews

This month's headlines

Unseen risks: insuring against the impact of AI gone wrong
Machine vs human: finding the balance
Is embedded insurance the end of traditional broker channels?
Client aspirations take centre stage as advisers rethink retirement planning
Maximise TFSA contributions before year-end
Subscribe now