The Broad-based Black Economic Empowerment Act was formulated as an economic tool of transformation. The revised B-BBEE Codes of Good Practice, born out of the Act came into effect on 1 October 2015 after a 12 month transition period. During this time, Pioneer Foods revisited its strategy and targets in order to implement an action plan that supports government’s and the company’s vision of building a more economically inclusive society.
For the 2019 financial year, the Group was rated according to the Amended Agri-BEE Sector Code of Good Practice ("Agri-BEE Code") and achieved a level 6 rating.
Transfer in ownership: Phase 1, 2006
Phase 1 took place in 2006 when 18.1 million vote-bearing Class “A” standard shares were allocated to all Group workers below management level. This translated into employees acquiring 10% of the voting rights in the Group.
The cost to the Group of the 2006 BEE transaction was R163 million (4.4% of the Group’s market capitalisation at the time). The Group supplied the funding with 70% of the dividends from these shares being used to redeem a notional debt. To date, the Group has paid out more than R17 million in dividends to the beneficiaries of this scheme.
The Group used the capital obtained through this second transaction in capital expansion programmes. This created employment opportunities for the communities in which we operate.
Phase 2, 2012
Phase 2 was conducted in 2012, when the Company issued a total number 28.6 million shares (with a Net Asset Value of just over R2 billion) to special purpose vehicles (SPV). These SPV’s are detailed below:
The terms of Phase 2 were detailed in a circular to shareholders, dated 19 January 2012, a copy of which is available here.
On 6 March, 2019 the company announced its repurchase from certain black economic empowerment parties of shares issued to them under the Phase II BEE Transaction, the lock-in and finance period of which is due to expire on 15 March 2019. For details click here.