One for the staff

Zweli Mokgata

Zweli Mokgata

African Bank Limited (Abil) launches its BEE public offering today with special emphasis on creating value for employees of recently acquired furniture retailer Ellerines.

The deal is aimed at a wide range of people, mainly black employees, clients, a development trust and the public.

The offer is valued at R600million. The company intends for its black shareholding to grow to more than 15percent in 10 years.

The company's Masonge public offering is issuing a total of 30million shares, which will be sold based on the shareholder's status, either as an Ellerines employee, an African Bank employee or a member of the general public.

Thami Sokutu, Abil's executive director, said: "This deal is structured in such a way that people closest to the company will receive the highest discount."

Ellerines employees will receive as much as 80percent discount, while members of the public will receive a discount of 30percent.

About five million shares will be reserved for all Ellerines employees - black and white. Each employee will be able to buy a maximum of 350 Abil shares at 35 cents a share.

The second category is made up of black Ellerines employees, who will have the opportunity to buy an unlimited number of shares at R2 a share.

Black Abil employees will be able to buy an unlimited number of shares at R3 each.

Existing Eyomhlaba (Abil's first BEE transaction) shareholders will be able to buy the shares at R5,50 each and four million will be made available for them.

The Nozala Investment Trust will take up one million shares at R6 a share and black public investors will have to scramble for four million shares at R7 a share.

Louis Chetty, an analyst at Rand Merchant Bank Morgan Stanley, said: "I think that the African Bank deal is a broad-based one and is in line with the charter. African Bank is taking the right steps in achieving what the charter aims to promote."

The offer is scheduled to end on September 13. Prospectuses and educational documents on the offering can be obtained through the Masonge call centre on 0860 233 225.