Insurer Momentum Metropolitan Holdings and Absa Group have agreed to fund a stock-ownership programme in which 3% of the insurer's shares will be offered to black employees.
Momentum staff will acquire 44.9 million ordinary shares as the company seeks to align its ownership with the demographics of its client base, the company said on Friday.
The deal will be funded by issuing preference shares through a special-purpose vehicle to Momentum and Absa, for as much as R700 million and R350 million respectively, Momentum said. About 26.9 million shares are in Momentum's treasury and about 18 million will be bought in the open market, it said. The shares will be held by the iSabelo Trust, which is being set up to manage the transactions.
As much as 20% of the trust's distributable income, excluding special distributions, is payable to staff until the special-purpose vehicle is no longer a beneficiary. Shareholders will vote on the plan on 26 November.
Units in the programme will be allocated as follows: