The family trust of Mathews Phosa, the former treasurer general of South Africa’s ruling party, will be issued stock in RCL Foods Ltd. (RCFL) worth 120 million rand ($12 million) as part of a takeover of TSB Sugar RSA.
RCL, South Africa’s largest poultry producer, today bid 4 billion rand for TSB, a unit of Remgro Ltd (REM), it said in a statement. As part of that agreement Phosa’s MTM Family Trust will be issued 6.93 million RCL shares valued at 17.32 rand each by the company, a total of 120 million rand. The trust will have eight years to pay for the stock, according to RCL.
Phosa “is a director of TSB Sugar Holdings and has been a key participant in driving its strategic initiatives,” RCL said. His family controlled about 3 percent of TSB.
The African National Congress-run government is pushing South African companies to boost black ownership to help up make up for discrimination during the apartheid era, which ended in 1994. The policy has been criticized for boosting the wealth of a limited group of black South Africans rather than benefiting the majority.
“Black economic empowerment, although a work in progress, did not make any meaningful or substantial contribution towards addressing the twin ills of poverty and unemployment,” Phosa said in a speech in October last year. “What it did do is create an upper class of wealthy black investors who initially funded their wealth with debt through the acquisition of shareholdings in successful white or international businesses.”
RCL closed trade at 18.30 rand in Johannesburg.
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