Coronation empowerment deal may pay off for shareh
Coronation empowerment deal may pay off for shareholders
January 24, 2005
By Sherilee Bridge-David
Johannesburg - Coronation Fund Managers, the second-largest independent fund management company, may award its shareholders a special dividend with the R153 million proceeds of its Imvula empowerment deal.
This would be the first time shareholders derive a direct benefit from a black economic empowerment deal.
Coronation said last month that it was considering returning the capital it received from Imvula, the broad-based black staff trust that is acquiring 10 percent of Coronation, to its shareholders through a special dividend.
Alternatively, it could keep the cash on the books of Coronation Fund Managers, where it would beef up the balance sheet.
Announcing that Coronation had increased staff ownership of its company to 21 percent, chief executive Thys du Toit said the company had realigned the interests of its clients, shareholders and staff to enhance competitiveness and sustainability.
Last week management and senior employees struck a deal to acquire a further 11 percent stake in the company.
The deal will be facilitated by the company`s major shareholder, Coronation Investments and Trading, which is the holding company of the group`s South African and international operating subsidiaries.
As a result, Coronation Investments and Trading`s shareholding will be reduced to 44 percent.
Du Toit said the importance of the two transactions lay in the company`s recommitment to its policy of offering staff significant ownership in the business.
`The new deal is designed to retain our senior professionals and will reignite the ownership culture that was the bedrock of our success in the early nineties,` Du Toit said. Coronation employs about 150 people internationally.
On December 1 2004, the company`s full-time black staff members numbered 51, which was about 44 percent of the company`s South African staff. At least 55 percent of those black staff members were women.
In the year to September, the first full year Coronation Fund Managers traded as a listed entity, the company reported headline earnings of R130 million, or 34c a share. The company proposed a dividend of 25c a share.
Since then the company has performed well, growing its assets under management from R64 billion at the end of September to R70 billion by mid-January, and Du Toit is bullish about 2005.
Shares in Coronation Fund Managers lost 2.53 percent to close at R3.85 on Friday. The sector fell 0.42 percent.
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