Windfall of R9.7bn for AB InBev BEE scheme investors
More than 40,000 black investors and employees at AB InBev (AB InBev) will share a R9.7bn windfall from a BEE scheme launched a decade ago.
When the scheme matures in April, employees and black-owned liquor retailers would have locked in a substantial increase in the share price of the company: those who invested R100 in the scheme will pocket a pretax payout of about R76,000, the world’s biggest brewer said on Monday.
The R7.3bn scheme, which was housed in a special purpose entity called SAB Zenzele, was launched by SABMiller (which has since been taken over by AB InBev) in 2010, when the group sold about 8% of its local subsidiary to BEE investors that also include SAB Foundation, a trust focused on funding small businesses.
Investors had injected a small amount of cash — a minimum of R100 for shares worth R50,000 and up to R25,000 for shares valued at R500,000 — and the rest had been funded via dividends over the past 10 years. No external bank funding was required.
The BEE investors would have an opportunity to reinvest a portion or all their payout into a new R5.4bn scheme called SAB Zenzele Kabili that AB InBev is launching, the company said. SAB Zenzele Kabili, which will be listed on the BEE segment of the JSE, will hold shares directly in AB InBev, the world’s biggest brewer with more than 500 brands and a footprint in more than 50 countries.
Included in the transaction is that SAB will contribute the equivalent of R2.973bn worth of AB InBev shares to SAB Zenzele Kabili, and in return, SAB Zenzele Kabili will issue preference shares to SAB. Preference shares are a form of hybrid security with characteristics of debt and equity. They carry no voting rights but often represent a high claim on earnings than ordinary shares. Such shares typically do not trade on the open market, and do not dilute net profits attributable to shareholders.
SAB will contribute the equivalent of R811m worth of AB InBev shares from the end of March, at no further cost to SAB Zenzele Kabili, to further enhance the capital structure of SAB Zenzele Kabili, the company said.
The SAB Foundation has committed to reinvest the equivalent of up to R400m worth of AB InBev shares into SAB Zenzele Kabili, which be listed on the JSE's BEE segment on April 15.