JSE-listed Business Connexion (BCX) is moving ahead with its plan to delist "A" shares, a process it started around 18 months ago.
The group needs to repurchase the shares as the JSE has told it the stock does not meet the bourse's requirements for being listed, as they are not freely transferable, BCX says in a statement.
The "A" shares are held by UCS shareholders, after BCX bought out the bulk of the UCS business, which was wrapped up in May. Deputy CEO Vanessa Olver has explained BCX is buying back the shares to improve its empowerment credentials, as its BEE stake was diluted after the UCS deal.
BCX issued 101 million new shares as part payment for the UCS acquisition, leading to UCS shareholders owning more than 25% of BCX. The rest of the deal, about R30 million, was paid for in cash.
Some of the shares were class "A" and the JSE gave approval for the stock, including "A" shares held by BCX's empowerment partners, to be listed as long as BCX later bought back and delisted the stock.
In September 2010, BCX issued 75.1 million "A" shares to predominantly black economic empowerment participants. Under the deal, black shareholders were locked in to the stock until the end of August 2015.
In terms of the UCS deal, BCX had to buy back and delist the "A" shares within three months after the acquisition was wrapped up, which was in September 2011. However, shareholders voted against the move as they felt, because BCX was trading under a cautionary, the stock may gain in value.
BCX has since terminated those talks and says it aims to buy back 25 million "A" shares. It says the move is subject to the necessary approvals and cautions shareholders as the price of its shares may change.
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