Transcript Bidvest BEE Presentation

Black Economic
Empowerment
at
BIDVEST
November 2003
“From diversity comes strength”
Group organogram
Many of our businesses are directly empowering the communities they serve
Bidvest rationale and philosophy for BEE
 To sustain the political transformation South Africa requires economic
transformation
 BEE is a national, business and socio-economic imperative for South Africa
 Empowerment should not be determined by percentages. It should be
measured on the rand value of projects and wealth created, educational
initiatives and skills development
 Bidvest’s BEE strategy will reflect the underlying Bidvest philosophy of
retaining 100% ownership of subsidiaries and 100% control of cash flow to
drive future growth
 Bidvest’s BEE strategy will deliver true BEE influence in line with The
Department of Trade and Industry (DTI) Strategy for broad-based economic
empowerment and its associated BEE bill, and the BEE scorecard
Bidvest’s BEE initiatives
 Considerable emphasis on educational initiatives and skills development
over the years
 First empowerment shareholding in Bidvest taken up in 1996
• Women Investment Portfolio Holdings (5%)
• Worldwide African Investment Holdings (5%)
 Also significant investment through joint ventures and direct equity
stakes was undertaken at divisional level
 Prior to this 2003 BEE equity transaction Bidvest estimated the
enterprise value of the BEE businesses within Bidvest at R500million
 Bidvest is one of only three South African companies selected as a
component member of the Dow Jones Sustainability World Index 2004
Bidvest’s Dinatla initiative

2003 BEE transaction valued at R2,1 billion

Dinatla Investment Holdings, a broad-based BEE consortium, to
become a 15% shareholder in Bidvest

Board restructuring to reflect Dinatla initiative

Bidvest Charter (enterprise based)

Ongoing and Proposed Initiatives
• Employment Equity
• Skills Development
• Corporate Social Investment (CSI) Initiatives
• Affirmative Procurement
• The Bidvest Dinatla Trust
“These initiatives allow for a broad-based and representative empowerment
grouping to share and have influence in the mainstream economy and in the
future of Bidvest, both in South Africa and internationally.” Brian Joffe
Bidvest’s Dinatla initiative
 Dinatla Investment Holdings is a broad-based black empowerment
consortium comprising a number of national and regional organisations
 Majority shareholders who already have a long standing BEE relationship
with Bidvest:
• WDB Investment Holdings is a subsidiary of the WDB Trust
• Bassap Investments
 Regional representation includes:
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Nandi Heritage House
Ukuvula Investments
Jalang Investment
Culca Investments
Silverknight Properties 50
Tlhware Trading
Still to be nominated
New Heights 269
 The Bidvest Dinatla Trust
KwaZulu-Natal
Eastern Cape
Gauteng
Free State
Northern Cape
Northwest Province
Mpumalanga
Limpopo
The Dinatla initiative
 Dinatla Investment Holdings to become a 15% shareholder
• BEE consortium to take up 45 000 000 shares (15%) equity stake in Bidvest – single
largest shareholder – worth approximately R2,1 billion
• Shareholding at holding company level and inclusive of both local and international assets
• Delivers massive BEE influence
• Voting rights acquired, together with shares, and commence on implementation
• Payment for shares will be made in October 2006 – amount payable will be the market
price but subject to a minimum of R42 and a maximum of R60 per share
• Dinatla has the right to early settlement at any time
• No encumbrance on Bidvest’s balance sheet
• A new company, BidBEE, will be established and its securities listed on the JSE to own,
manage and distribute the consideration
• Shareholders passed the transaction at a scheme meeting on November 10 2003
• Subject to Court approval – implementation on December 8 2003
Unique features of transaction
Call option for 5%
BEE
Shareholders
The
Vendors
Distributions
BidBEE units
listed on JSE
100%
BidBEE
Dinatla
Dinatla
obligation
15%
Specified
distributions
Bidvest
“Our innovative and unique initiatives will position Bidvest for participation in
private and public opportunities providing us with an additional platform for
growth in the future.” - Brian Joffe
BEE shareholding across Bidvest
Bidvest BEE effective shareholding
Shareholder Register as at 30 June 2003
Pension funds, insurance
companies, unit and investment
trusts, and other managed funds
Private investors
Dinatla Investment Holdings
Total:
Of that:
Foreign registered funds
Empowerment Institutions
Additional shares under control of
BEE asset managers
Before:
On implementation
of Dinatla initiative:
90,8%
77,2%
9,2%
7,8%
-
15,0%
100,0%
100,0%
11,5%
9,8%
30,1%
40,5%
23,5%
34,9%
6,6%
5,6%
Bidvest and divisional board appointments
 Bidvest Board
• Dinatla to appoint several directors to the Bidvest Board
• Further Board restructuring to follow
 New Bidvest Executives
• Muriel Dube – Appointed to the Bidvest Board as Commercial Director
• Lionel Jacobs of Bassap Investments (a core shareholder in Dinatla)
Appointed to the Bidvest Board – Commercial Director, Bidserv
• Thembi Kunene – Commercial Director, Bidfreight and Bidfreight Terminals and
Executive Director of Safcor Panalpina
• Lesibana Ledwaba – Financial Director, Rennies Travel
“Our BEE partners will add real value to the everyday business of
Bidvest as well as help us implement BEE transformation.” Brian Joffe
Bidvest Charter
 First of its kind – enterprise-based charter
 Reflects the requirements of the DTI Scorecard
 Will be the framework for the Group’s continuing transformation
 Objectives include
• Active BEE participation through employment equity at
executive, divisional and operational level
• Skills development
• Affirmative procurement
• Recruitment of personnel
• Enterprise development
• Building BEE supplier capacity
“I’m hoping that, with our empowerment partners, Bidvest will become an
influential empowerment group, assisting the historically disadvantaged to have
influence in the mainstream economy.” Brian Joffe
Ongoing and proposed initiatives

Numerous initiatives implemented at divisional level
• Decentralised approach allows initiatives to address the specific
needs and opportunities available within each division
• Legal compliance by all business units
• Comprehensive sustainability and BEE report to be compiled to
monitor ongoing initiatives across the Group – due November
2003
• Targets will be incorporated into the Bidvest Charter
Employment equity
 Bidvest is above the national average for Employment Equity
 Between October 2001 and October 2002 total staff complement
grew by 20,62%. The majority of new staff were black males
(an increase of 33%) and black females (an increase of 15%)
Skills development
 Bidvest is committed to training and developing its staff
 Training for black males and females doubled between 2000 and 2002
 Training may be associated with movement to junior management
positions
 Training costs in 2003 amounted to R37,2 million
Skills development (continued)
The Bidvest Academy
 Has been established as a vibrant and dynamic forum which will
add real value to Bidvest
 Each six-month programme aims to transfer both business and
leadership skills to young executives (under 40 years of age) not
currently involved in the Group’s strategic decision-making process
Corporate Social Investment
 These initiatives are undertaken at the discretion of divisions based
on their understanding of the needs of the community in which
they operate
 To the value of R11,4 million in 2003
Educational
‘Back to School’ rebate project
CIDA City Campus
Crown National Adult Aducation Programme
Hill High School Adult Education Programme
Rally to Read
Reach and Teach
Safcor Panalpina education bursaries
Steiner Hygiene Educational Roadshow
Financial Support
Avril Elizabeth Home
Give Kids the World
Namsov Community Trust
Nelson Mandela Children's Fund
Outreach Program
Reach for the Hand
SAPS Hillbrow Children Project
Youth are our Future
Employment
The Business Trust
Cotac Bridging Programme
Rennies Travel Internship Programme
Sasko Sally Thola Baking Training Centre
Health, Environmental and Other
Centre for the Rehabilitation of Wildlife (CROW)
Good Luck Foods
Masithwalisani Methodist (HIV/AIDS Single Mothers)
Nurturing Orphans of Aids for Humanity (NOAH)
Queen Noti Clinic, Tsolo
Topsy Foundation (AIDS orphans)
Preferential procurement
 Bidvest’s procurement in South Africa is estimated at R30 billion
 Targets are being set in accordance with the DTI scorecard
 Should only 10% of Bidvest’s procurement in South Africa be targeted to be
spent with affirmative suppliers, this would amount to R3 billion per annum
The Bidvest Dinatla Trust
 Has been founded to serve the educational and social needs of Bidvest
employees, their dependents and their communities
 The Trust will have a strong HDI focus
 Initiatives may include, but will not be limited to: skills development
programmes, educational support, family support programmes, health
interventions and Bidvest community development
 Bidvest will provide initial funding of R1 million per annum to facilitate Trust
initiatives until the Trust itself is income producing
“We want to facilitate the ongoing development of employee skills and
participation in value creation across the Group.” Brian Joffe
Bidvest BEE
“The R2,8 billion Bidvest/Dinatla Black Bconomic Empowerment deal was unique and a cleverly
done arrangement,” - Mike Lawrenson, Coronation Fund Managers
“We support the deal and our view is that although there’s a cost to shareholders...we believe the
benefit of the deal exceeds the cost because it positions Bidvest as an empowered company, …the
potential upside is much, much greater than the cost of the deal.”
Alan Miller, Chief Executive, Stanlib Asset Managers
“We’re happy that the black empowerment consortium is a well structured organisation and that
there will be a substantial number of people benefiting. Bidvest could also benefit from being one
of the first big industrial groups, whose interests cross a wide spectrum of the economy, to do a
significant empowerment transaction at group level,”
Rob Forsyth, Investec
“On implementation of the Dinatla transaction Bidvest will be well placed in all areas outlined in the
DTI Scorecard,” - Brian Joffe
“We once again commend you on your deal and wish to state upfront that Sanlam Investment
Management (SIM) is fully supportive of and committed to Black Economic Empowerment,” – Johan
van der Merwe, Chief Executive Officer, SIM