AYO Technology Solutions (AYO) has informed its shareholders that it would repurchase R619 million in the Government Employees Pension Fund (GEPF) shares as part of its settlement agreement with the Public Investment Corporation (PIC) and GEPF.
In a statement the ICT group made earlier today, AYO said it is revealing some of its settlement deal following an article in the Daily Maverick on March 25, which disclosed the settlement terms, and which the group said misrepresented the agreement between it and the PIC.
The settlement was made after the PIC had approached the Western Cape High Court looking to dissolve and recoup its R4.3 billion investment in AYO.
AYO said: “The company agreed to repurchase 17 202 756 ordinary shares in issue from the GEPF for a total repurchase consideration of R619 423 100. Subsequent to the initial repurchase, the GEPF will retain a minimum stake of 25.01% in the company.”
According to the group, the GEPF has the option after a period of three years from the date of the initial repurchase to sell up to a further 5% of AYO shares that it holds at the higher rate of R20 per AYO share and the prevailing 90-day volume weighted average price of AYO shares traded on the JSE, subject to JSE regulatory approvals and the solvency and liquidity of the company.
“In the event that the GEPF’s shareholding in AYO reduces below 25%, the GEPF will retain the minority protection rights it is entitled to exercise as of March 23, 2023,” the group said.
The group said the rights mentioned above will remain in a place subject to the condition that the GEPF may not unreasonably withhold approval for a resolution by AYO shareholders, authorising AYO to render financial assistance to the subsidiaries of AYO, and subject to regulatory approvals.
The GEPF shall for every 10% of the shares it holds in AYO be entitled to nominate one director to the board of directors of AYO, it said.
“The board shall continue to be chaired by an independent non-executive chairman and, for as long as the GEPF holds no less than 15% of the shares in AYO, the chairman of the board shall be appointed with the approval of the GEPF,” the group said.
The group said AYO’s memorandum of incorporation will be amended to give effect to the minority protections and the AYO board, which shall be filed with the Companies and Intellectual Property Commission by no later than three months from March 23, 2023.
The company wishes to inform shareholders that the agreement was entered into between the parties in good faith and in the best interests of the company, and for the benefit of all shareholders, the group said.
“Going forward, the company, the PIC, and the GEPF look forward to their joint endeavours in creating growth and value in the business of AYO,” it said.