Italtile on Tuesday announced the exit of Arrow Creek as a BEE shareholder of the company.
The JSE-listed ceramic tiles retailer in 2007 entered into a BEE deal in which 10.7% of its entire issued ordinary share capital was issued to The Italtile Empowerment Trust‚ Four Arrows Investments 256 Proprietary Limited and Arrow Creek Investments 74 Proprietary Limited.
In terms of subscription agreements‚ between Italtile and Arrow Creek and Italtile and Four Arrows‚ immediately following the issue of Arrow Creek shares and the Four Arrow shares‚ Italtile subscribed for 600‚000 preference shares in Arrow Creek for an aggregate subscription price of R120.6 million and 800‚000 preference shares in Four Arrows for an aggregate subscription price of R160.8 million.
Italtile said its shareholders reached an agreement on May 28 in terms of which Aka Capital and the trustees for the time being of The Aka Capital Education Trust would exit the investments that they hold in Italtile through Arrow Creek.
In terms of the Arrow Creek sale agreement‚ Italtile Ceramics‚ a wholly owned subsidiary of Italtile‚ will acquire 100% of the issued ordinary share capital of Arrow Creek for a total consideration of R100.
In terms of the restructuring of the initial BEE transaction Italtile requires the Arrow Creek shares to continue to be owned by a BEE shareholder‚ accordingly‚ the Italtile Foundation Trust has been created in order to acquire the Arrow Creek shares.
“This will require the necessary funding to pay the R120.6 million purchase consideration due to Arrow Creek. Such funding will be provided to the foundation trust by Italtile in the form of a loan amounting to R120.6 million‚” Italtile said.
At least 85% of all distributions made by the foundation trust will be for the benefit of black people‚ the company added.
In terms of the agreement dated May 28 between the foundation trust and Italtile‚ the Italtile loan is interest free and is repayable in full on the tenth anniversary of the advance date. - I-Net Bridge