Old Mutual today announces the maturity of its Broad-Based Black Economic Empowerment transactions (“BEE transactions”) that to date have created a net value of over R7.9 billion, based on current market prices, for Old Mutual’s South African empowerment partners, staff and communities.
In 2005, Old Mutual South Africa and Mutual & Federal (collectively “Old Mutual”) entered into the BEE transactions valued at a combined R4.1 billion at the time and which represented approximately 13% of the equity value of the consolidated South African operations.
The Black Business Partners’ (“BBPs”) component included the Women’s Investment Portfolio Holdings (“WIPHOLD”) Consortium, the Brimstone Consortium and Mtha, for whom a combined R2.1 billion in net value was created in the last ten years.
Old Mutual’s South African employees also benefited through various employee share trusts that formed part of the BEE transactions, creating net value of R4.6 billion for more than 9,000 management and employees.
The company further undertook to support the development and growth of emerging financial advisors and brokers through the Old Mutual Black Distributors Trust and the Mutual & Federal Black Broker Trust. In addition, the Old Mutual Education Trust provides scholarships for higher education to members and staff of the participating trade unions, and their dependents. The Mutual & Federal Community Trust focused on micro enterprise development, education and skills capacity building as well as social development and welfare projects. Collectively, these trusts delivered a net value in excess of R1.2 billion, of which R925 million is available for future distributions to qualifying beneficiaries.
The aggregate value that remains within these Trusts will continue to be used to support and develop critical transformation initiatives.
According to Old Mutual Emerging Markets CEO Ralph Mupita, “This has been a landmark BEE deal with a broad number and reach of beneficiaries. Together with our partners, these BEE transactions have created significant value in the lives of South African communities and we are looking forward to continuing this journey with WIPHOLD and Brimstone into the future.”
Brimstone formed the Brimstone Empowerment Share Trust (BEST), to create a more sustainable model of support to organisations, by awarding them with Brimstone shares at no cost. BEST beneficiary organisations support in excess of 3 500 000 beneficiaries spread across South Africa.
Brimstone Executive Chairman, Fred Robertson commented: “This year Brimstone celebrates its 20th anniversary and has an established track record of creating value for all its stakeholders. It has paid cash dividends to its shareholders for the past 13 years and when these dividends are paid they have a direct benefit to our many broad-based NGO shareholders. Investments like Old Mutual make it possible for us to continue to deliver on our mandate, and enable us to have a real positive impact on society at large.”
The partnership with the WIPHOLD Consortium demonstrated Old Mutual’s commitment to contributing towards women’s economic empowerment as a growth strategy for South Africa. This consortium brought together WIPHOLD, Sphere and the WIPHOLD NGO Trust, collectively reaching over 300 000 beneficiaries who are representative of the rural women from some of the most disadvantaged areas of the country. The WIPHOLD Consortium beneficiaries have benefitted from these BEE transactions by a net value of more than R1.4 billion.
Gloria Serobe, Executive Director at WIPHOLD, added, “This is a proud moment for me, as a founder of WIPHOLD, reflecting not only on what has been achieved over the last decade through our partnership with Old Mutual, but also on the structures that have been put in place, which will continue to support and benefit women across South Africa. Old Mutual’s conscious decision to partner with the WIPHOLD consortium was and is a demonstration of its commitment to putting women’s economic empowerment at the heart of its growth strategy for South Africa, which sets them apart from their peers”.
Mupita concludes, “Our partners have been an integral part of our success to date and we have collectively agreed to continue our relationship past the BEE transactions to build and share an enduring legacy in South Africa. Nedbank and Old Mutual have committed R100 million each over 3 years to invest in initiatives aligned to the National Development Plan.
These initiatives will include:
o the development, support and job creation of black entrepreneurs in South Africa in partnership with Brimstone
o the support of small-scale agricultural commercialisation which seeks to address rural unemployment, food security and sustainability in partnership with WIPHOLD
o The development of township economies and affordable housing in partnership with Izingwe”.
Old Mutual remains committed to the ongoing transformation and development of South Africa through the company’s focus on investment in socially responsible projects, BEE funding, infrastructure investment and support of education initiatives.
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