SOCIAL REVIEW

EMPOWERED OWNERSHIP

Highlights
  • PPC achieved a BBBEE level 4 (from level 8 under the 2007 codes of good practice) rating under the revised codes of good practice in December 2016, a year ahead of plan (April 2018)

Challenges
  • Maintaining a favourable BBBEE rating
  • Improving black ownership in line with the revised codes and mining charter targets

BBBEE status

 Element points    Weighting   Points
achieved
   % score   Discounting
applied
 
Overall BBBEE score   109   85,85          
Equity ownership   25   16,41   65,63   No  
Management control   19   11,84   62,31      
Skills development   20   15,86   79,28   No  
Enterprise and supplier development – preferential procurement   25   21,75   87,00      
Enterprise and supplier development   15   15,00   100   No  
Socio-economic development   5   5,00   100      
BBBEE status level   Level 4  
Black ownership   13,79% black ownership; 6,01% black women ownership
Empowering supplier   Yes
BEE procurement recognition   100%
Empowered ownership

After completing PPC’s R4 billion rights offer on 16 September2016, the group’s BBBEE ownership credentials declined. The rights offer raised capital to strengthen our balance sheet and fund expansionary growth projects, but as the number of issued shares rose from 625 million to 1 625 million, the company’s empowerment credentials were significantly diluted.

Following maturity of the 2008 BBBEE transaction, strategic business partners (SBPs) and community service groups (CSGs) subscribed for 15,6 million shares under compulsory subscription agreements, and the company received R1 billion on 15 December 2016. Simultaneously, PPC bought back and cancelled 48,6 million shares at 10 cents each. This transaction reduced net stated capital by 33 million shares to 1 591 million shares, further reducing our empowerment credentials.

Work to design and implement a new BBBEE (BEE III) transaction is progressing well and will be communicated to shareholders in the second half of calendar 2017.