March 8, 2004

By Roy Cokayne

Pretoria - Imperial Holdings' black economic empowerment (BEE) initiative has been approved by an overwhelming majority, with 99.5 percent of the votes cast at a general meeting on Friday in favour of the resolution.

Those voting in favour of the resolution represented 145.65 million shares.

The resolutions tabled at the meeting related to the creation of a new class of shares, deferred ordinary shares; an amendment to the articles of association specifying the rights and conditions of the deferred ordinary shares; and the specific issue of 22.76 million deferred ordinary shares, constituting 10.1 percent of Imperial, for cash to Ukhamba Holdings, a broad-based BEE company.

All the conditions of the empowerment transaction have now been fulfilled and the deferred ordinary shares will be issued tomorrow.

Bill Lynch, Imperial's chief executive, said the approval of the deal by the company's shareholders was the culmination of a long-term strategy and investment by Imperial to effect broad-based empowerment.

"Ukhamba will be able to assist Imperial with its transformation initiatives, incorporating, among others, skills transfer, employment equity, empowerment procurement practices and equity ownership. 

"It is envisaged that Ukhamba, as a shareholder of Imperial, and by virtue of Imperial's enhanced BEE status, will generate and enhance future business opportunities for Imperial," he said.

Lynch said previously that there was at least an additional 15 percent indirect BEE shareholding in Imperial, which meant it would have more than 25 percent black ownership after the Ukhamba deal and would qualify as a "black empowered" company.

In terms of the transaction, Ukhamba's beneficiaries would include all of Imperial's historically disadvantaged employees -about 15 000 - and a number of communities.

Ukhamba is an investment holding company established by Imperial in 1998 with R15 million in seed capital to create a culture of saving, generate wealth and facilitate the transfer of skills within Imperial's base of historically disadvantaged employees.

It has total assets of R55 million, an annual turnover of R67 million and profit after tax of R7 million.

Its wholly owned subsidiaries include Ikaheng Human Resources, Ukhamba Fleet Services, Rainbow Sanitation, Ukhamba Industrial Equipment and a Cell C Johannesburg Airport franchise.