Sells majority stake in Isilo Steel.
BSI shareholders have been advised that JSE listed BSI and its wholly owned subsidiary Isilo Steel have now entered into a series of transactions to give effect to the B-BBEE transaction.
In terms of the transaction Isilo Investments (held 51% as to Tutuni Investments 14 (Proprietary) Limited and 49% as to Thuthuka Trust) will acquire an effective 51.12% in Isilo Steel. This will result in Isilo Steel being 51% Black Owned and 30% Black Women owned (as defined in the Codes).
The material aspects of the transactions that give effect to the B-BBEE transaction are the sale of BSI’s High Volume Strategic Clients division to Isilo Steel and the subscription by Isilo Investments for a 51.12% interest in Isilo Steel for R32 299 000.00. The High Volume Business targets managed-risk “blue chip” volume users of steel and related products.
This results in BSI disposing of a 51.12% interest in Isilo Steel to Isilo Investments.
In order to finance the Subscription, BSI has subscribed for, and Isilo Investments has issued to BSI, one cumulative redeemable non-participating preference share for a subscription price of R32 299 000.00. The coupon rate on the Preference Share will be the prime rate less 2% and the Preference Share will be redeemed by way of dividends. The final redemption amount of the Preference Share will be determined by adjusting the Preference Share Subscription Price according to a formula based on net profits after tax earned by Isilo Steel up until and including the year ending 31 March 2020, which amount is limited to R75 000 000.00.
Full details of the transaction can be found on Sharenet.