Paper and packaging group Mpact has concluded a broad-based black-economic empowerment (BBBEE) deal that will see a purpose-formed trust subscribing for 10% of the ordinary issued shares in group subsidiary Mpact Operations, which holds its South African businesses.

The company last month resolved to pursue a BBBEE ownership transaction by establishing the Mpact Foundation Trust, which would, through its wholly-owned subsidiary Mpact Foundation, act as the BBBEE partner to the group following the exit of its previous BBBEE partner Shanduka Packaging in 2012.

Mpact confirmed on Wednesday, 1 April 2015, that the Mpact Foundation Trust and the Mpact Foundation had since been established. The beneficiaries of the Mpact Foundation Trust would include Mpact Operations employees; emerging entrepreneurs, suppliers and customers involved in the packaging or recycling sectors; primary, secondary and tertiary education initiatives and other individuals or groups that operated within the communities in which the Mpact Operations operated.

In addition, at least 85% of distributions to further the Mpact Foundation Trust's objectives would be used to benefit black people, of which at least 40% must be black women. The group outlined that the transaction had been structured to achieve ‘true’ empowerment; create a sustainable funding structure that was not reliant on external bank funding, share price appreciation or dividend payments; materially improve its BEE credentials; and preserve exiting shareholder value.

“We view this BBBEE deal as a flagship empowerment initiative and look forward to not only continue with our existing BBBEE projects, but also pursue new empowerment initiatives that have been identified to make a real difference in South Africa,” CEO Bruce Strong said in a statement.

Source: Engineering News (Edited)