EMPOWERMENT: Metropolitan Extends Strategic Partnership
Recent Western Cape Business News
Bellville-based Metropolitan is continuing to lead the way by extending its successful BEE strategic partnership beyond the original transaction. The success lies in the fact that the partnership has substantially benefited both parties and is one of the few transactions of this nature not significantly affected by the adverse economic conditions.
The first five-year phase of Metropolitan’s mutually advantageous partnership with Kagiso Trust Investments (KTI) ends on 30 September 2009. It began in 2004 when KTI acquired a 10% stake in Metropolitan through the purchase of five-year convertible redeemable preference shares in the group. This purchase was funded independently by a consortium of local banks.
In December 2005, Metropolitan and KTI entered into the second phase of the partnership when KTI purchased additional convertible redeemable preference shares that increased their equity holding to 17%. Once again, the funds were raised independently. At this juncture, the Metropolitan Empowerment Trust was established and Metropolitan management acquired 25% of the KTI stake.
On several occasions – in 2005 and again in 2006/7 - KTI increased their shareholding through the acquisition of ordinary Metropolitan shares in the open market. By December 2008, KTI and the trust had a combined, direct and indirect, beneficial shareholding of approximately 24% in Metropolitan.
At its 2008 financial year-end (31 December), Metropolitan was awarded maximum points for ownership in terms of the Financial Sector Charter. A score of 16 points out of a possible 12 was achieved, which included being awarded the maximum number of bonus points. When assessed on the basis of the department of trade and industry’s codes of good practice, the group scored 22 out of 20 for ownership, being awarded 2 out of the
maximum of 3 bonus points. Both scorecards were rated by NERA, an accredited ratings agency.
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