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- Momentum and Absa agreed to a deal whereby 3% of the insurer’s shares will be offered to black employees.
- The preferred shares will be issued through a special purpose vehicle to Momentum and Absa for R700 million and R350 million respectively.
- At least 55% of the program’s revenue will go to black female employees.
Insurer Momentum Metropolitan Holdings and Absa Group have agreed to fund a stock ownership program in which 3% of the insurer’s shares will be offered to black employees.
Momentum staff will acquire 44.9 million common shares as the company seeks to align its ownership with the demographics of its customer base, the company said Friday.
The deal will be financed by issuing preferred shares through a special purpose vehicle for Momentum and Absa, for up to R700 million and R350 million respectively, Momentum said. About 26.9 million shares are in Momentum’s treasury and about 18 million will be purchased on the open market, he said. The shares will be held by iSabelo Trust, which is being set up to manage the transactions.
Up to 20% of the trust’s distributable income, excluding special distributions, is paid to staff until the special purpose vehicle is no longer a beneficiary. Shareholders will vote on the plan on November 26.
The program units will be assigned as follows:
- Eighty-five percent of the program’s revenue will go to black employees and at least 55% to black employees.
- Staff eligibility to participate will be determined by instructions established by Momentum
- The shares will be subject to a maximum vesting period of seven years and will be redeemable after a period of 10 years has elapsed after their initial allocation.
- The plan is for the program to have a maximum duration of 15 years.
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