![]() ![]() ![]() The transaction circular is no longer available on the RCL Foods website (its document library only extends to 2015). It argues that “the buyback funds will flow back to RCL Foods and there will be no cash implication” save for advisor costs and share transfer tax. It says the buy-back of these shares will be used to repay the funding owed by these vehicles to it. The group provided funding to these BEE vehicles in 2014 to acquire the shares. It will buy back shares from its employee share trust (the ESOP Trust), and special purpose vehicle (SPV 2) through a targeted buyback of nearly 20 million common shares from the trust and SPV 2 at R11.49 per share as well as 43 million nominal shares at 1c each. ![]() The company strongly objects to this being called a ‘bail out’, although were the transaction not under water, RCL would not have to buy back these shares. In effect, it is being forced to buy back the shares held by its BEE shareholders, because since the implementation of the transaction its “share price has significantly declined in value, resulting in the … transaction being materially underwater at the end of its term in May”. RCL Foods, majority owned by Remgro, has said it will ‘unwind’ its 2014 black economic empowerment (BEE) transaction through a share buyback worth R230 million. ![]()
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