What to do next for existing SAB Zenzele shareholders

The SAB broad-based BEE scheme, SAB Zenzele, will reach maturity in May 2021, and a new scheme, SAB Zenzele Kabili, will launch in the same month to continue creating value for beneficiaries.

SAB Zenzele is the largest BBBEE scheme in the history of SA in the fast-moving consumer goods sector, having reached a maturation value of R9.7bn. 

Launched in 2010, the landmark SAB Zenzele transaction endeavoured to give its retailer partners — tavern and bottle store owners, retail customers and employees — an opportunity for real ownership in a company that has brought South Africans together for more than 125 years.

Retailer shareholders who invested R100 in 2010 will have received a total pretax payout of R77,518 when the transaction fully unwinds in May 2021. 

SAB plans to continue this trajectory of empowerment and wealth creation for staff, retailers and beneficiaries of the SAB Foundation. The company is offering SAB Zenzele retailer shareholders the opportunity to reinvest a portion of their remaining proceeds in a replacement BBBEE ownership transaction through the SAB Zenzele Kabili scheme, which will own R5.4bn in AB InBev shares.

SAB Zenzele Kabili will be listed on the BBBEE segment of the JSE to facilitate liquidity and broaden ownership to other BBBEE investors, including qualifying SAB employees, through a new employee stock ownership plan. 

SAB Zenzele was scheduled to unwind in March 2020, with SAB Zenzele Kabili envisioned to launch shortly thereafter.

However, restrictions driven by Covid-19 prevented the necessary shareholder scheme meeting from taking place, when beneficiaries would have voted regarding payouts and reinvestment options.

The SAB Zenzele board and SAB recognised that the postponement would have a negative impact on the expected cash flows of shareholders, which had been worsened by the pandemic. 

Download the SAB Zenzele app here to vote >>>

The board subsequently resolved, together with SAB, that each SAB Zenzele retailer shareholder would be paid a cash amount equal to 77.4% of the calculation of its right and entitlement from the unwind of SAB Zenzele, less applicable costs and taxes. This cash payment, which amounted to R3.49bn, took place in April 2020. 

If Zenzele Kabili becomes operative, it will be listed on the BBBEE segment of the JSE on May 28 2021. From this date, anyone wanting to buy shares must be a qualifying black person in terms of the BBBEE Act, and can acquire them through a JSE broker or any trading platform they may already use. 

The remaining entitlement of SAB Zenzele retailer shareholders is therefore 22.6% of the calculation of their right and entitlement from the unwind of SAB Zenzele, as at the date of the unwind, adjusted for inflation over time.

In a video address to shareholders, SAB Zenzele chair Dr Penuell Maduna announced that the scheme meeting will now take place on May 10 2021, in a digital environment where beneficiaries will vote regarding reinvestment of this portion.

Those who reinvested into SAB Zenzele Kabili will become global shareholders, receiving 25% in dividends annually, without having to wait 10 years before being able to sell shares or be paid out. SAB Zenzele Kabili shareholders will be able to trade immediately after listing. 

“We all want to build a prosperous future for ourselves and our families. At SAB, we understand that this takes hard work and good partnerships,” said Maduna. “SAB Zenzele Kabili is set to be our biggest success yet, and, despite these tough times, it’s time for a new scheme for new dreams and ownership for all.”

Download the SAB Zenzele app here to vote >>>

For more information, call 086-190-0903.

This article was paid for by SAB Zenzele Kabili.