Siseko Njobeni
18 December 2006
Johannesburg — CEMENT maker Lafarge SA has finalised a R1,1bn deal in which it has sold stakes in two of its businesses to black economic empowerment consortium Sinako and 1400 of its employees.
In July, Lafarge, the third-biggest cement manufacturer in SA, announced the sale of 26% of its mining business and 10% of its cement-manufacturing businesses to Sinako. Sinako is made up of women-led companies Peotona and Motjoli Resources. Businesswomen Cheryl Carolus, Wendy Lucas-Bull, Thandi Orleyn and Dolly Mokgatle own Peotona. Nchakha Moloi and Nonkqubela Mazwai own mining group company Motjoli.
Lafarge said it would sell the mining activities through Lafarge Mining, which includes aggregates, gypsum and limestone. The sale of the cement-making businesses would be through Lafarge Industries.
After finalisation of the transaction, Sinako would hold 75% of the empowerment stake and Lafarge's historically disadvantaged employees would hold 25%, though an employee share ownership trust. Of Lafarge's 2000 employees, 70% are historically disadvantaged. Peotona and Motjoli hold 40% of Sinako, and an education trust and a community trust would have 53% and 7%, respectively.
Lafarge said it was considering issuing equity to employees not considered historically disadvantaged under a separate employee trust.
The group said the transaction had been financed through a combination of a Nedbank loan, contributions by Peotona and Motjoli and a vendor funding package from Lafarge. The vendor finance was for the 25% employee stake.
Carolus said: "The building materials sector is critical to the growth that will be stimulated by the infrastructure roll-out."
Lafarge CEO Albert Corcos said the 53% stake of the education in Sinako would contribute to skills development.
He said the deal had been structured so that the education trust got a preferential dividend of R77m over the next 10 years "in order for it to initiate its activities from the first year".
The community trust would benefit communities in areas in which Lafarge had operations. Lafarge SA is part of French cement group Lafarge, the biggest building materials producer.
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