Buyback boost for BEE partner
Paracon will repurchase 36,3 million shares from WDB in a move that will let WDB repay a loan of R49m and still hold almost 63-million debt-free shares in Paracon.
WDB bought 99,2-million shares to gain a 25,1% stake in June 2003, in a deal funded by the R49m loan from the Industrial Development Corporation (IDC).
Those shares are now worth about R160m.
Paracon will pay 135c a share, which was a 17,7% discount to the trading price at the time the buy back was negotiated. The money will come from its cash resources.
Because the regular dividends paid by Paracon to its shareholders will no longer be needed to service the load, WDB will be able to keep that cash and use it for its own projects, including social upliftment programmes that support more than 23000 rural women, said WDB CEO Tania Slabbert.
The relationship with Paracon had been successful from the start, Slabbert said, and WDB was extremely pleased by the increase in the value of its investment.
“The share buyback will enable us to settle our entire obligation to the IDC and then hold our remaining shares unencumbered,” she said.
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