S. Africa Firm’s Sale Is Landmark Deal
JOHANNESBURG, South Africa — Anglo American Corp. of South Africa said Wednesday that it is selling the bulk of its stake in Johnnies Industrial Corp. to black investors in a landmark deal for black economic empowerment.
South Africa’s National Empowerment Consortium, representing 50 black economic interest groups, is to take up 41% of the industrial holding group in a deal worth about $890 million.
The sale by Anglo, South Africa’s largest company with vast operations in mining and industrial businesses, caps more than a year of negotiations with the National Empowerment Consortium in the company’s effort to help increase black participation in the post-apartheid economy.
“I hope this transaction will be one of many to help black people in this country,†Cyril Ramaphosa, executive deputy chairman of New Africa Investments Ltd., one of the NEC’s main members, said at a news conference.
Ramaphosa led the negotiations with Anglo. He joined the investments company earlier this year after giving up his post as secretary-general of the African National Congress.
Under the agreement, the NEC will buy an initial 30.35 million shares in Johnnies Industrial, also known as Johnnic, at $11 each, retroactive to July 1.
The NEC will also have an option to raise its stake to 35% over 18 months.
In addition, a maximum 6%, or 9.1 million shares, will be made available through an offer by the NEC to smaller members within the group over four months.
The NEC and Anglo American agreed to put Johnnic shares in a voting pool made up of 35% of Johnnic. The NEC will control the votes in the pool, though Anglo would be protected as a minority shareholder. Anglo’s rights include the power to veto attempts to sell any of Johnnic’s units.
Anglo will keep the remaining 6% for a minimum of 18 months and the NEC will have right of first refusal over those shares for five years. Ramaphosa said the companies plan to cooperate on other projects.
Johnnic’s board of directors will be reconstituted to consist of 20 members, half of which will come from the NEC. The NEC will also name a new Johnnic chairman.
All of these steps are expected to take place after a 60-day period ending Oct. 28, during which the NEC will review Johnnic’s finances and secure financing.
“We are confident members of the NEC will be able to get the funding,†Ramaphosa said.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
