Black Economic Empowerment (BEE) consortium Batho Bonke Capital has sold 24.6 million shares in the Absa group, in a deal worth $370 million.
The sale was made on Wednesday, Yolanda Cuba a director at the group announced, and sees almost all of the shares held by Batho Bonko disposed of.
The consortium sold 24.6 million shares at a price of 132.50 rand ($15.23) per share, with the transaction totalling roughly 3.26 billion rand ($375 million). The sale accounts for approximately a 3.4 percent stake in Absa – South Africa’s biggest retail bank.
The sale signals the end to one of the most high-profile BEE deals signed at the end of the apartheid era. With the government specifying black ownership targets for privately-owned companies, the Batho Bonke group took a discounted deal for the purchase of the shares in 2004 as such helping Absa reach black-ownership targets.
Some shares were retained by members of the Batho Bonke consortium, however – those members being employees at the bank. Thus, roughly 0.4 percent of shares remain in the hands of Batho Bonke.
The Batho Bonke group is a collection of black investors – including black Absa employees – and is led by famed anti-apartheid activist and businessman Tokyo Sexwale.
Meanwhile, Absa – having completed a restructuring led by majority-owner Barclays Plc – has seen a decline in profits over recent months, reporting mid-year earnings of 4.3 billion rand ($494 million) in the period ended June; a 6 percent drop.
In response to poor performance, the banking group has announced a strategic push to expand its South African corporate banking unit, and to grow its business across Africa.
The company will be combining its investment and corporate banking units, while continuing its restructuring of retail units, disclosed the group’s financial director David Hodnett, reports BDLive.
Hodnett explained that the banking group’s strategies respond to a changing environment presenting opportunities to the bank which has recently undergone highly-publicised restructuring moves in an effort to improve efficiencies. He said: “In the corporate space, we have seen an opportunity to grow our share of the market in South Africa and across Africa…”In the past year we have created a corporate bank alongside our investment bank in order to take advantage of the product expertise we have developed in Absa Capital”.
