Excluded from BEE deal as it could have compromised them - PIC boss.

The Public Investment Corporation (PIC) voted against the Mapitso consortium's participation in Tiger Brands' (JSE:TBS) BEE scheme "because it could have compromised the independence of non-executive directors of Tiger".

That was the word from Brian Molefe, CEO of the PIC, on Monday.

Members of the thwarted Mapitso consortium made up of current and former non-executive directors, included Bheki Sibiya, Chris Nissen and Neethianandan Padayachee.

King 3 lays out stringent terms of independence for non-executives.

The other objector who thwarted Mapitso was Coronation, which shares the views of the PIC. As a result of these objections, Tiger accepted it would not receive the required 75% approval and dropped the resolution.

The rest of the BEE participants were obliged at the AGM. As a result, Brimstone picks up an additional 1.01%, Thusani Trust 1.01%, the Black Managers' Trust 0.44% and the Tiger Brands Foundation 5.05%.

The deal entails the issue of 19m new shares. The Tiger Brands Black Management Trust received its shares at par value of only 10c, compared to the prevailing R155.88. Brimstone Investments picked up a further 1.8m shares at a knock-down R7.40.

The Tiger Brands General Staff Trust paid a fuller R155.86, the Tiger Brands Foundation R148.07 and the Thusani SPV R148.07. The participants are all loan financed. Dividends will offset debt over the years.

Phase Two of Tiger's BEE deal was supposed to raise black participation by an additional 10%. That would bring black participation above 25%.

After falling to a low of R151, the Tiger Brands share price gained 460c. It has held near-record levels in spite of a 58% drop in headline earnings per share in the period to March.

Write to David Carte: davidcarte@moneyweb.co.za

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