CIARAN RYAN: The SAB Zenzele Kabili share scheme went live on May 28, nearly two weeks ago, and has been an outstanding success with the shares trading at R180 recently. Many listeners and readers of Moneyweb want to know if they can acquire these shares and of course the answer is yes.
By way of background, SAB Zenzele Kabili replaces the previous black-empowerment share scheme, which was called SAB Zenzele. That created nearly R10 billion worth in value for shareholders over a 10-year period. Joining us to explain what the new scheme is all about and how to acquire the shares and, just as importantly, who qualifies, is Duncan Pask, company secretary for SA Breweries.
Hi Duncan, the SAB Zenzele Kabili share scheme was listed on the JSE on May 28 and that’s almost two weeks ago. This is the replacement scheme to the hugely successful SAB Zenzele share scheme. How’s it going so far?
DUNCAN PASK: Hi Ciaran. We’ve seen fantastic demand from the public to be part of the scheme. We’ve also seen our retailer customers – our bottle-store owners, our taverners – keen to get more shares rather than wanting to exit in the short term.
And even though there’s significant value for them on the table at the moment, if you’re an existing shareholder you entered that SAB Zenzele Kabili listing at R40 [per share]; 10 days later it is at R180. So they are sticking with us. We’re glad about it. We’re obviously wanting to make as much access to the scheme as practically possible.
At the moment R180 [per share] is giving us a total market value of R7.2 billion, which is quite high, seeing that SAB Zenzele Kabili holds only R5.4 billion of AB InBev shares, and then has preferential share debt of R2.9 billion, giving us a net asset value [NAV] of closer to R2.5 billion. So, three times NAV is a generous market value.
Simply put, R180 is going to require a fair amount of beer sales to make that price a reality.
But if you don’t like the price today and you don’t want to buy at R180, wait a week. It may come down and may go up – who knows?
But we’re very aware that we’ve got a lot to live up to in terms of that process at the moment. We want to encourage as many people as possible to join SAB Zenzele Kabili, but to join us for the long-term growth that we look to achieve rather than the short-term gains.
CIARAN RYAN: So, when you talk about long-term growth, what kind of time period do you have in mind?
DUNCAN PASK: Ideally, when we talk to our employees who are part of the scheme, or our retailer customers as part of the scheme, we like to say that [for] a scheme of this nature to generate real value takes between five to 10 years. You know, that’s a real opportunity for the AB InBev share price to appreciate in value through the performance of the company and selling beer globally, and a chance to declare dividends biannually to reduce the debt that sits in the entity – and through those mechanisms create real value in SAB Zenzele Kabili over time.
So, we’re looking for people to join us over that sort of period. You put your money in and then you leave it for 10 years and you look at what it creates. That’s the almost R10 billion in value we create. SAB Zenzele didn’t happen overnight. It happened over 10 years. That’s the sort of investment outlook for the shareholder partners we’re looking to bring into SAB Zenzele Kabili.
Our employees, for example, are locked in for five years. They’ll be able to trade their first tranche of shares in SAB Zenzele Kabili only on June 1, 2026, because we want them to stay in it for the long term.
CIARAN RYAN: Last week you announced that the scheme is now available to trade on the EasyEquities share-trading platform. That’s been the first broad-based black economic empowerment scheme [BEE] available on the platform. What was involved in getting this agreement together with EasyEquities, and why did you do it?
DUNCAN PASK: We’re very proud to be the first BEE scheme to be available on EasyEquities. It’s really about accessibility for the public, giving everyone access to buy shares. SAB Zenzele Kabili wasn’t an IPO, so you didn’t apply for participation. You had to have a brokerage account or existing share-trading platform to buy shares in the open market.
We understand that those channels are sometimes difficult to access for most people, and we saw EasyEquities as a great opportunity to level the playing field in terms of access. Practically, SAB Zenzele Kabili is a BEE scheme and therefore there are a few additional hurdles to gain access to trade the shares, the most important one being that you have to confirm your race through the submission of an affidavit.
The key engagement with EasyEquities was to ensure you made it as simple as possible to give access, but still meeting the legal requirements for our listing compliance.
CIARAN RYAN: How do people who want to start trading in SAB Zenzele Kabili shares via the EasyEquities platform get started? What’s the process?
DUNCAN PASK: The first step would be to download the EasyEquities app, available on the Apple App Store or the Google Play Store. There are simple steps to follow to open an account. I would encourage people to follow @EasyEquities on Twitter. They’ve got some fantastic step-by-step guides for you to get a clear understanding of exactly what you need to open an account. Once you’ve opened an EasyEquities account they will still have to verify you through the submission of a standardised affidavit and a certified copy of your ID.
CIARAN RYAN: Just to be clear, this is a black economic empowerment scheme, so you are going to have to verify your race by way of affidavit. That means you’re going to have to supply an affidavit and upload it to EasyEquities – is that correct?
DUNCAN PASK: Hundred percent, Ciaran. That’s the same process, whether you are accessing it through a share-trading platform through your bank, through our nominee service at Computershare or through EasyEquities. It’s a JSE requirement that if we list on the BEE segment of the JSE we verify all persons who then trade in our shares before they are given access. You have to do it only at the get-go. Once your account is ticked that you are indeed a qualifying person in terms of the Broad-based Black Economic Empowerment Act, it’s up to you to fund your account and get trading today. So there’s a bit of legwork involved at the front end, but once you’ve cleared that hurdle you’re free to trade in the shares through any means available – and EasyEquities is a great way to do that.
CIARAN RYAN: A number of Moneyweb readers also wrote to us and we sent them the link to Computershare, which is another way that people can sign up for these shares. I believe that is working as well, although there is a delay, just to inform people, that there could be a bit of a backlog. There’s a helluva queue, a helluva demand for these shares, so they should expect to wait a few days before they get a reply. Is that also correct?
DUNCAN PASK: Hundred percent. Computershare is running as fast as it can, through as many applications as it can at this time. I would encourage you, if you haven’t heard back from them in 48 hours, to give them a call on 0861 100 937 to see how your application’s going. But it is churning through those as quickly as practically possible. And if you need assistance in completing those applications and getting them completed, they’ve also got a walk-in centre in Rosebank that you can visit.
CIARAN RYAN: Just one time more, where can people find more information about EasyEquities, which is what we’re talking about today?
DUNCAN PASK: They can follow us on South African Breweries on Facebook and Twitter, where we’re posting constantly around channels of access, including EasyEquities and the easy step guides. Otherwise, they can go and download the EasyEquities app, or I would encourage them to follow @EasyEquities on Twitter, where there are some fantastic video guides on how to be part of SAB Zenzele Kabili.
CIARAN RYAN: Great. Duncan Pask, thanks very much for that. That was Duncan Pask, who is company secretary at South African Breweries.
Brought to you by the South African Breweries (SAB).
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