Growthpoint Properties has asked its shareholders to approve a R250 million broad-based black economic empowerment (B-BBEE) ownership scheme for a major empowerment transaction that will continue to fund the flagship corporate social investment (CSI) initiatives that the REIT supports.
The proposed transaction would see Growthpoint allocate shares to a special-purpose CSI Trust, which would use dividends from its Growthpoint shares to fund future CSI initiatives focused on education, entrepreneurship, and enterprise development, actioned through Property Point which delivers programmes that support growing small black businesses in the property sector and educational projects such as Growsmart, which assists primary school learners in the Western and Eastern Cape.
“The proposed Growthpoint CSI Trust would become a valuable source of perpetual funding for our social impact projects. It would also enhance our B-BBEE credentials by helping to achieve our equity ownership targets in line with the Property Sector Code,” says Shawn Theunissen, Growthpoint Properties Head of Transformation and Corporate Social Responsibility.
The finalisation of the B-BBEE deal would see an increase in broad-based elements of the Property Sector Charter scorecard for black ownership of Growthpoint. Growthpoint is a Level 1 BEE contributor.
An extraordinary general meeting will be held on Wednesday, the 19th July 2023 for Growthpoint shareholders to consider the proposed scheme, which includes entering into a loan agreement with the Growthpoint CSI Trust to enable it to acquire the R250 million of Growthpoint ordinary shares, valued at a share price of R12.50 (less than 0.6% of the total Growthpoint ordinary shares in issue) together with their full voting rights and dividend entitlements on the same basis as all other Growthpoint ordinary shares.
The Growthpoint CSI Trust has been structured to comply with both the B-BBEE Act and the requirements for a public benefit organisation. Besides shareholder approval, as a major B-BBEE transaction, the scheme also needs the green light from South Africa’s B-BBEE Commission.