Mustek has set up a black economic empowerment deal that will see Safika Holdings acquire voting rights equivalent to 25% plus one share in Mustek.
Mustek says Safika will subscribe for one preference share entitling it to exercise the voting rights immediately. The subscription value of the preference share is R5 million.
In terms of the deal, Safika will be entitled to acquire, over a five-year period, up to 25% plus one share in Mustek.
Safika`s acquisition of the stake will be carried out through a mechanism based on Mustek`s achievement of pre-agreed dollar-based hurdles at the level of earnings before interest, tax, depreciation and amortisation (EBITDA).
Mustek says the EBITDA hurdles have been formulated with the intention of ensuring that the issue of shares in terms of the deal will have a non-dilutory effect on existing shareholders, determined on an EBITDA per share basis.
"Mustek currently has a number of BEE initiatives in place relating to employment equity, procurement and product distribution channels," it says.
"The introduction of BEE equity ownership will further meaningfully improve Mustek`s positioning in relation to its competitors and significantly enhance Mustek`s potential for improved participation in public and private sector opportunities, thereby providing an enhanced platform for growth."
The group says the deal allows it to implement a defensive strategy (retaining current market share and clients), a growth strategy (expansion of market share into government and other areas), ensure compliance with BEE transformation requirements, increase visibility and brand recognition and potentially improve its market rating.
Safika, established in 1994, has various interests in media, telecommunications, IT, human resources development, financial services and mineral resources. It has nominated its CEO, Vuli Cuba, as deputy non-executive chairman of Mustek.
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