DURBAN - Momentum Metropolitan Holdings (MMH) is set to reward its employees by establishing a broad-based employee share ownership plan in which eligible employees will hold 3percent of the financial services company's issued share capital.
The group said on Friday the transaction would result in the acquisition of 44.924million ordinary shares, which constitute 3percent of its entire issued ordinary share capital, for the benefit of eligible employees.
“The empowerment transaction will result in the acquisition of 26.94million MMH shares currently held in treasury, as well as the acquisition of 17.99million MMH shares from the open market,” the group said.
Momentum described the rationale behind the establishment of the scheme as a move to embrace the authentic advancement of economic transformation and the economic participation of black people, and the move aligns with its growth strategy.
“Broad-based employee ownership allows MMH to represent the demographics of the clients it serves and also develops an ethos in employees that is aligned to shareholder and client expectations,” the group said.
The allocation of units of the scheme will be structured such that at least 85percent of the economic benefits from the scheme will accrue to black employees and at least 55percent to black women employees.
The group will establish Momentum Metropolitan iSabelo Trust to acquire and hold the 44.92million shares. The iSabelo Trust will acquire 26.94million MMH treasury shares, representing 1.8percent of the MMH issued ordinary share capital, from Momentum Metropolitan Strategic Investments and 17.99million MMH open market shares, representing about 1.2percent of MMH’s issued ordinary share capital.
“The trust will acquire the MMH open market shares at the prevailing market price within 60 business days upon all conditions precedent to the relevant documents which regulate the transaction being satisfied,” the group said.
Momentum expects the MMH treasury shares to be acquired thereafter, and the acquisition is based on the trailing 30-day volume weighted average price (VWAP) less the discount, adding that the discount will be determined as 10percent of the aggregate consideration paid for the MMH open market shares and the 30-day VWAP value of the MMH treasury shares.
The group said the acquisition of the trust shares would be funded by the capital contribution made by a newly incorporated special purpose vehicle using the proceeds through the issue of A preference shares to Absa Bank for a total consideration of not more than R350million and the issue of B preference shares to MMH for a total consideration of not more than R700m.
MMH shares closed 1.05percent lower at R14.13 on the JSE on Friday.
BUSINESS REPORT