BL Premium reports that the PPC board has approved a R380m loan for the group’s newly formed employee share ownership trust to buy up a 10% stake in the construction materials company.
The 10% share capital is set to be linked to the performance of the company’s operations rather than that of the share price, the company said. Some 1,500 of the group’s 1,800 workers will qualify for the incentive, when dividends are declared. The Johannesburg-based company last paid dividends in 2015. MD at PPC Cement SA, Njombo Lekula, noted on Monday that the formation and financial backing of the employees’ share scheme followed its recent June announcement of a R200m share buyback programme, which it believed was the best way to offer value to investors. The loan, which will accrue interest at the local prime rate, has no final repayment date. Of the dividends paid to the scheme, 75% will go towards the loan and the balance to the beneficiaries. “PPC has been built upon the shoulders of its employees and this transaction provides a meaningful way of rewarding those in SA who do not participate in PPC’s long-term incentive plan to share in the creation of shareholder value,” said group CEO Roland van Wijnen. But, with a link to company performance, it remains to be seen how much value will be created in a muted cement and construction market in SA.
- Read the full original of the report in the above regard by Michelle Gumede at BusinessLive (subscriber access only)
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