SAB introduces SAB Zenzele Kabili, a B-BBEE scheme that will own R5.4b billion in AB InBev shares.
Since its inception in 2010, SAB Zenzele, SAB's broad-based black economic empowerment (B-BBEE) scheme, has disbursed R4 billion to shareholders, with an additional R9.6 billion to be paid out when it winds up.
Hoping to continue the success of SAB Zenzele, SAB has now introduced SAB Zenzele Kabili, a black empowerment scheme that will own R5.4 billion worth of Anheuser-Busch (AB) InBev shares. As of 10 October 2016, SAB is a direct subsidiary of AB InBev.
Speaking at the SAB Zenzele Kabili launch, vice president of corporate affairs South Africa Zoleka Lisa explains how South Africa is gearing up for a massive cash injection through the scheme.
“In April this year, Zenzele will be reaching its maturity and pumping R14 billion into the South African economy, while it has already paid out R4 billion in dividends to beneficiaries including SAB employees, growing enterprises, and retailers,” she shared.
She added that it is important for SAB to participate in projects that empower its partners and consumers.
Zenzele share scheme portfolio
- SAB Foundation owns 18 percent of Zenzele
- SAB Employees own 40 percent of Zenzele
- SAB Retailers own 42 percent of Zenzele
Beneficiaries of the scheme
Around 40,000 families have benefited from the scheme. Attending the launch was one of these individuals, Jane Mkhanya, who is the owner of Getty’s Tavern. She initially invested R5,000 ten years ago and shares how she used her payout from the scheme. “When my mother passed away, I took over the family business and used my payout to carry on my family’s legacy and also support my family,” she said.
Taking a truly broad-based approach with the new scheme to benefit the lives of ordinary South Africans, director at M&A and treasury at AB InBev, Richard Rivett-Carnac, said:
“Looking back at SAB Zenzele’s 10-year track record, it is inspiring to see what has been achieved and the economic growth that it has contributed to the country.”
He added that for any empowerment scheme to be truly meaningful and successful, it needs to make a massive difference in the lives of people. He also believes that a win for their retail shareholders is ultimately a win for SAB as a whole.
Approach to the new scheme
SAB has used the lessons learned from the old scheme in approaching SAB Zenzele Kabili. One of these learnings being that the previous trust did not have an equal allocation of shares across all employees in the organisation. This has been changed for the new scheme.
Previously, transparency of pricing was also an issue. It was difficult to accurately know the value of shares. This has also been revised and SAB will provide access to publicised share prices.
Existing shareholders will be voting on whether to reinvest a portion of their unwind value in the new SAB Zenzele Kabili scheme.
How the scheme will be funded
- R678 million of equity from existing SAB Zenzele shareholders
- R600 million will come from a new broad-based ESOP funded by SAB
- R344 million will be reinvested by SAB Foundation
- R811 million in AB InBEV discounted shares from SAB
- R2.97 billion of 10-year preference share vendor funding from SAB
Closing off the launch was Andrew Murray, vice president of finance Africa at Anheuser-Busch InBev, who described the launch of SAB Zenzele Kabili as a celebration of a longstanding commitment to their partners.
SAB also intends to list the SAB Zenzele Kabili scheme on the JSE on Wednesday 15 April 2020.
Pictured: SAB director of capital markets Valdene Reddy, SAB vice president of finance Africa Andrew Murray, JSE representative Kenneth Seema, SAB vice president corporate affairs Zoleka Lisa, SAB director M&A and treasury Richard Rivett-Carnac, and JSE CEO Leila Fourie blowing a Kudu horn to signal that the JSE goes live at 09:00 sharp.