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Verimark Holdings Limited - Embarks on a grassroots empowerment initiative
Verimark Holdings Limited
Share Code: VMK
ISIN: ZAE000068011
Verimark Holdings Limited Embarks on a Grassroots Empowerment initiative
Direct marketing company, Verimark Holdings Limited, has concluded a black
economic empowerment transaction by ensuring that 10,1% of its equity passes to
Teba Development, a not for profit Company working directly with rural
communities in South Africa.
Teba Development is an established public benefit organisation active in rural
development programmes in particular in remote rural communities in Eastern
Cape, Free State and KwaZulu Natal.
It is involved in a wide spectrum of rural assistance projects - including
school building, water and sanitation projects; skills development and training
programmes in rural communities; agricultural training and irrigation projects;
and health and welfare projects. Over 7000 rural households benefit by
participating in projects run by Teba Development.
The R29m required to buy the 11,5 million shares valued at R2.50 each involved
in the transaction is being advanced to Teba Development by the Verimark MD
Michael van Straaten in his personal capacity from the Van Straaten Family
Trust. The current share price is already at R3.30, which give Teba an
effective discount R9 million.
The loan to Teba Development is to be repaid out of dividends. But, as Verimark
has such a generous dividend policy - it is committed to paying a bi-annual
dividend of approximately 80% of headline earnings - the deal is cash positive
almost with immediate effect.
There is a second leg to Verimark"s black economic empowerment initiative.
Within a year, 4 million of the 11,5 million Verimark shares issued to Teba
Development are to be transferred to a Verimark Employees" Trust so that
Verimark staff members can also share in the benefits of the company"s increased
prosperity.
While there is no immediate obligation on a direct marketing company like
Verimark to become empowered, Van Straaten believes it was the right thing to do
in the long-term interests of the company.
"With the listing of a company like Verimark, and the kind of expansion
programme we have in mind, we believed it was important to establish our black
economic empowerment credentials right up front.
"Equally, we felt that it was important for us to partner with a development
organisation such as Teba Development because the grassroots nature of their
activities will ensure that the broadest possible number of rural people will
eventually benefit from its shareholding in Verimark."
The MD of TEBA Development, David Cooper, said:
"This is a wonderful opportunity for TEBA Development to participate in the
future growth and development of a strongly entrepreneurial company like
Verimark and to use the proceeds to continue the valuable work we are currently
doing in rural communities in the country. It is especially gratifying for us
that through this transaction Verimark has demonstrated its recognition for the
importance of rural development in South Africa."
ISSUED BY: MOTIV INVESTOR COMMUNICATIONS
Graham Fiford Tel: (011) 305 - 7312
ON BEHALF OF: VERIMARK HOLDINGS LIMITED
Michael van Straaten Tel: (011) 699 8000
SPONSOR: PSG CAPITAL LIMITED
Date: 08/11/2005 02:51:04 PM Produced by the JSE SENS Department
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