SIBANYE-Stillwater has drawn a line under an 18-year old black empowerment deal which it has restructured writing off billions of rands in the process.
In terms of a restructured BEE deal, new terms have been offered to black-owned businesses which together had a 26% stake in Lonmin, first signed in 2003. Lonmin had previously impaired the loans, therefore this restructuring is a settling of management accounts that nonetheless reflected owed amounts.
The new terms of the BEE structure features a debt pile cut by more than half to be repaid using a trickle-down dividend of 10% of their respective shares in Lonmin, now renamed Marikana division following Sibanye-Stillwater’s 2019 merger with the company.
James Wellsted, a spokesman for Sibanye-Stillwater, said the amount initially owed by the empowerment partners, which include Phembani Group and the Public Investment Corporation (PIC), to Lonmin was worth “billions of rands”.
“They would never have been able to pay it,” said Wellsted, who added that the empowerment partners would participate in full dividend flow from Lonmin once the debt had been repaid. He declined to provide details as they were confidential.
The empowerment partners would be able to participate in “the significant cash flows being generated by Marikana” division once the restructured amounts had been repaid, Wellsted said.
Lonmin created Incwala Resources in 2003 which had a stake in Lonmin along with other groupings, many of them community trusts. Shanduka Group came to control Incwala until its stake was bought out by Phembani Group, a company led by Phuthuma Nhleko, the former CEO of telecoms company, MTN.
“We welcome the restructuring of the Marikana B-BBEE (broad-based, black economic empowerment),” said Neal Froneman, CEO of Sibanye-Stillwater in a statement.
“The revised structure will allow for a sustainable capital structure for the Marikana B-BBEE shareholders, as well as immediate access to distribute cash flow and the ongoing transfer of tangible value.”
The new structure was supported by all the BEE shareholders, he said.