Press / Media | Cadiz News
Makana increases stake in Cadiz Holdings to 15%
20 July 2010
Cape Town – Cadiz Holdings today announced that its strategic empowerment partner, Makana Investment Corporation (Makana), will increase its effective shareholding in the company to 15% following the acquisition of a further 5% stake.
Broad-based empowerment group Makana acquired a 10% strategic equity stake in Cadiz in April 2004. A mutually beneficial relationship has been forged between the two parties over the past six years and the shareholding agreement was due to mature in May 2011.
Makana will purchase an effective 5% shareholding from the Cadiz employee share trust at a discount of 10%. Cadiz has shown its commitment by funding the acquisition through the subscription of preference shares in Makana, while Makana has demonstrated its commitment by extending the sale restriction on their original 10% shareholding until February 2017 in line with the expiry date of the additional 5%.
Cadiz Holdings chief executive, Ram Barkai, said: “The increased shareholding by Makana will strengthen our strategic partnership and enhance the empowerment credentials of Cadiz. The ongoing benefit which Makana brings to Cadiz significantly outweighs any dilution that may arise as a result of the shares being sold through this transaction."
Makana is controlled by the Makana Trust which was initiated by former president Nelson Mandela who expressed his wish to address the financial plight of former political prisoners and their dependants. The resultant broad-based beneficiary structure of Makana is therefore closely linked to the country's heritage.
Peter-Paul Ngwenya, chairman of Makana and a non-executive director of Cadiz, said the decision to increase the shareholding in Cadiz was motivated by the success of the partnership in recent years.
“The relationship between Makana and Cadiz is delivering tangible results for both parties and is enhancing shareholder value. A real benefit is that our partnership continues to generate mutual deal-flow and we have participated jointly in several high profile black economic empowerment (BEE) transactions."
Following the transaction, black ownership in Cadiz measured in terms of the DTI codes will increase to over 30% through the combined holdings of Makana and the Cadiz black employee share ownership scheme.
Barkai said transformation and broad-based BEE are critical in creating a sustainable business in South Africa, and Cadiz is one of the most transformed financial services groups in the country. Cadiz received an ‘A' rating from economic empowerment rating agency, Empowerdex, in its latest assessment based on the DTI codes of good practice with a score of 73.35%.
The transaction is subject to shareholder approval.
