Absa considers new R9.6 billion Black Economic Empowerment plan

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Absa Group Ltd. is considering a new Black economic empowerment plan that could constitute as much as 8% of South Africa’s third-largest lender, worth about 9.6 billion rand ($650 million) at current prices.

The program is likely to be inclusive of both external investors and staff, the Johannesburg-based bank said in a statement on Wednesday. The terms will be announced later in the year and the plan is expected to be implemented in 2022.

South African companies are encouraged to adopt Black empowerment plans to comply with government policies to redress financial inequality stemming from the apartheid era. Absa’s existing trust owns a stake of about 1.9% in the lender.

Absa had looked at setting up a new program following the exit of former shareholder Barclays Plc, but put the matter on hold when the coronavirus pandemic started to roil markets 18 months ago.

The shares rose 1.4% in early trade in Johannesburg, extending gains for the year to 19% and valuing the bank at 121 billion rand.

Main Image: kassfm

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