PPC - Pretoria Portland Cement Company Limited - PPC announces 15% progressive

PPC - Pretoria Portland Cement Company Limited - PPC announces 15% progressive  
Broad-Based BEE transaction for R2.7bn                                          
Pretoria Portland Cement Company Limited                                        
(Incorporated in the Republic of South Africa)                                  
(Registration number 1892/000667/06)                                            
JSE share code: PPC                                                             
JSE ISIN: ZAE000096475                                                          
ZSE share code: PPC                                                             
ZSE ISIN: ZWE000096475                                                          
PPC announces 15% progressive Broad-Based BEE transaction for R2.7bn            
Community Service Groups, Employees, Education and Industry Associations Trusts 
and Strategic Black Partners - many millions of stakeholders positively impacted
PPC is delighted to unveil its broad-based black economic empowerment ("BBBEE") 
transaction. The transaction will result in a 15% black shareholding in the     
ordinary share capital of PPC.                                                  
It is very broad-based and includes communities, construction industry          
associations and education trusts, community service groups, (CSGs) and         
strategic black partners (SBPs) as well as employees and managers of PPC.       
PPC believes that the transaction embraces the true spirit of empowerment whilst
taking cognisance of the Mining Charter and the DTI Codes as well as the        
company`s broad transformation objectives.                                      
Furthermore, this transaction will directly benefit an estimated 3,5 million    
people in South Africa, and many more indirectly in terms of their dependants.  
The vast majority of these stakeholders are black individuals and communities.  
John Gomersall, CEO of PPC commented: "This is a historic milestone for the     
company and the culmination of processes started many years ago. Today heralds a
significant achievement by the company as it reaches a key empowerment objective
at the equity level. We set out to ensure that the structure of the deal was as 
broad-based as possible, benefiting mainly black South African stakeholders."   
Employees, an educational trust, a construction industry association trust and  
two community service groups will be allocated the largest portion of shares at 
8.15% of PPC`s ordinary issued share capital after the implementation of the BEE
transaction. Strategic black partners will be allocated 7%.                     
A Construction Industry Associations Trust has been established to benefit      
existing and new black construction industry and related associations. The      
income of this trust will be allocated to specific projects which benefit       
previously disadvantaged individuals who are members of these Associations.     
Furthermore, an external trust has been established to develop skills and       
provide benefits to primarily black individuals with educational and skills     
needs in the cement, lime and aggregates manufacturing, mining, construction and
related industries.                                                             
PPC internal trusts for employees, black managers and a small allocation to non-
executive directors will be created to reward them for their years of creating  
value for the shareholders. An internal trust to provide benefits to the        
families of PPC employees has also been established. At least 85% of the        
benefits from both external and internal trusts will be allocated to black      
people.                                                                         
The trusts will acquire 6.65% of PPC shares from existing shareholders through a
scheme of arrangement in terms of Section 311 of the Companies Act.             
PPC will issue 8.5% new shares to the strategic black partners and community    
service groups.                                                                 
The strategic black partners were chosen because of their experience and        
involvement in the wider construction and mining arena and their ability to add 
value to PPC. Most of them have broad-based black components such as `black     
women` and `youth` among their stakeholders.                                    
PPC has welcomed two community service groups (CSGs) to participate in the BEE  
transaction with a stake of 0.75% each. The two groups selected are the         
Shalamuka Foundation and the Disability Empowerment Concerns Trust who have     
together contributed R5,4m of their own equity.                                 
The Shalamuka Foundation was formed in 2006 to raise long-term sustainable      
funding for the highly regarded Penreach programme, which provides teacher      
skills workshops to about 2,200 school teachers in 900 schools.                 
The Disability Empowerment Concerns Trust, the sole shareholder of the DEC      
Investment Holding Company (Proprietary) Limited was established in 1996 by     
organisations representing people with disabilities. Their activities touch over
2 million people of whom more than 85% are black.                               
There are four strategic black partners, being Nozala, Peu, iLima Portland      
Consortium and Capital Edge Cement Consortium.                                  
Nozala, is a broad-based women`s empowerment group, formed in 1996 and led by   
Salukazi Dakile-Hlongwane. Nozala was part of PPCs first BEE transaction when it
took a 50% stake in Afripack at the subsidiary level.                           
Salukazi said: "We have worked with PPC for some years and we are excited to    
participate in this transaction. It means we are further strengthening our close
relationship with the company and it also increases our determination to        
contribute to the success of PPC."                                              
Peu is led by Peter Malungani and was established in 1996. It is majority black 
owned and managed with a long-term view on investments focused on the           
infrastructure and construction sectors. Peu has a successful track record in   
providing investment assistance, and will contribute towards PPC by leveraging  
its strategic relationships and with business development initiatives.          
Peter said: "This is a natural fit for us given our sector focus. PPC is        
committed to the principles of BBBEE and we are delighted to be selected as one 
of the strategic partners in the transaction. We have also enjoyed a mutually   
beneficial relationship going back 15 years."                                   
iLima Portland Consortium comprises of iLima Group (Pty) Ltd, key shareholders, 
employees and strategic partners. iLima is a fully empowered investment company 
focused on infrastructure development projects, construction and project        
management, power generation and mining exploration. iLima is led by Mandla     
Gantsho and also has youth and black women components.                          
Mandla commented: "We are pleased that PPC has selected us as a partner for this
momentous transaction. We have already embraced the prevailing spirit, work     
ethic and determination within PPC to ensure that its businesses are profitable 
into the future and that development opportunities for young and female         
employees continue to be developed."                                            
The Capital Edge Cement Consortium (CECC) is a broad-based group formed in      
August 2006 primarily for the purpose of the Strategic Black Partnership with   
PPC. It is diverse with strong women and youth components and shareholder       
representation in all nine provinces. Its vision is to play a leading role in   
BBBEE through participation in initiatives that have the potential to create    
employment and skills transfer. The consortium is led by Jerry Vilakazi, (CEO of
BUSA and entrepreneur) with key management in Dr. Rejoice Simelane, Chama       
Kamukwamba, and Tiisetso Tsukudu. Together with the Black Management Forum (BMF)
the CECC is committed to human capital transformation and will further assist   
PPC in achieving its transformation objectives and proactively identify new     
business opportunities in sub-Saharan Africa.                                   
Jerry said: "Many black people will benefit through our participation in this   
transaction. We will seek to add value by deploying our strategic relationships 
as the company continues to grow. We look forward to assisting PPC in           
identifying and accessing black skills and talent."                             
Gomersall added: "It was important that we chose strategic black partners that  
can add value to PPC. We believe we have achieved a powerful and balanced       
combination. All participants in this transaction will be aligned with and      
contribute to PPC`s growth into the future."                                    
South African employees of PPC, nearly 85% of whom are black, are to benefit    
substantially from the transaction. Employees will be allocated 1.07% of the    
shares in the transaction. Additionally, current and future black managers will 
participate in 1.83% of the equity.                                             
John Gomersall said: " The success of our business lies in the hands of our     
current and future employees and in the communities in which we operate and it  
is vital that their interests are aligned with that of the company. Their       
participation in this BBBEE transaction is therefore a cornerstone.             
Additionally, it is essential that we are able to attract and retain future     
black management."                                                              
Existing black non-executive directors, namely Joe Shibambo, Zibusiso Kganyago  
and Ntombi Langa-Royds, will be allocated 0.05% between them.                   
PPC will facilitate the transaction in a number of ways. There will be          
contributions made to various trusts to acquire shares for the benefit of       
current and future employees and non-executive directors. The funding of the    
Construction Association and PPC Education, Community, Team Benefit and the     
Black Managers Trusts is through a preference share funding structure. New PPC  
shares to be issued to the SBP consortium are funded by a credit sale. All      
shareholdings have various vesting conditions and sale restriction periods.     
The funding in respect of the CSG and SBP components of the broad-based black   
ownership initiative amounting to approximately R1.5bn is underwritten by the   
Standard Bank of South Africa Limited.                                          
PPC raised short-term interest-bearing debt to fund its established growth      
strategy, expansion and modernisation capital expenditure programme and working 
capital requirements. The company will receive approximately R1.5bn of long-term
debt through the CSG PPC Loan and the SBP PPC Loan, which the company intends   
using to replace this short-term debt.                                          
The IFRS2 share-based payment charge is R557.4m and equates to 3.24% of PPC`s   
market capitalisation of R17.2bn as at close of business on 21 August 2008.     
The initial earnings and dividend dilution is 5.9% (8.5% of new shares issued   
reduced by 2.6% of PPC shares already bought back and held by PPC`s Treasury).  
It is PPC`s intention to buy back further shares when appropriate to limit      
dilution further.                                                               
PPC`s objective is to ensure that its South African businesses achieve a Level 4
Empowerment rating in terms of the BBBEE Codes of Best Practice by 2009 and the 
company is on track for this following the implementation of this transaction in
December and its other transformation activities.                               
Gomersall concluded: "Empowerment and transformation is at the heart of PPC and 
this is a significant stride towards broad-based equity ownership. Today is not 
the end of a process but the dawn of a new chapter in PPC`s 116 year history. " 
This BBBEE transaction is subject to the approval of shareholders at a general  
and a scheme meeting anticipated to be held on 11 November 2008. The effective  
date of the BEE transaction is expected to be on or about 15th December 2008.   
28 August 2008                                                                  
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Enquiries:                                                                      
PPC                      +27 11 386 9000                                        
John Gomersall                                                                  
College Hill             +27 11 447 3030                                        
Jacques de Bie                +27 82 691 5384                                   
Nandile Ngubentombi      +27 82 825 8004                                        
There will be a presentation at 10.00 today at Bowman Gilfillan`s Auditorium,   
165 West Street, Sandton, Johannesburg. There is also a media discussion        
immediately after the presentation and Q&A at 11.30                             
Date: 28/08/2008 07:06:01 Supplied by www.sharenet.co.za                     
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