Business Report | March 3, 2025
JSE-registered chemical manufacturer AECI announced on Friday a wide range of Black Economic Empowerment (BBBEE) transactions of R522 million, R5 million, to strengthen ownership eligibility for mining subsidiary AECI Mining Limited.
AECI shares rose 1.69% and closed at R95 in the JSE that day.
The B-BBEE transaction, a broad ownership scheme, includes the AECI Foundation, which subscribes to 73 586 835 B common stock at AECI mining at R7.10, each of which is R522M. This will provide 15.5% effective interest in AECI mining, increasing B-BBEE status by 51% black ownership and 51% historically disadvantaged ownership per code based on the mining charter.
According to AECI, the Foundation, a public interest organization focused on community development, will fund the contract in cash with R182.7M (35%) and expected vendor finance (65%) and will enter into contracts with expected vendor funding (65%).
B Common Stock has voting rights equal to common stock and economic rights associated with 15.5% of AECI Mining's South African revenues. The transaction, which was valued at R522M, is awaiting B-BBEE verification and regulatory approval, along with the expected effective date of March 20, 2025.
Pricewaterhousecoopers Corporate Finance provided a fair opinion to confirm the fairness of the transaction with shareholders, Aeci said.
The announcement comes two days after the company reported results for the year ended December 31, 2024, showing a decline in revenue and undergoing restructuring exercises to place it for growth.
AECI has embarked on a comprehensive restructuring and divestment programme, focusing on core business areas, particularly mining and chemicals.
Last year, the company advanced this strategy by signing sales agreements for non-core assets, including AECI asphalt and AECI animal health, which are expected to close in the first half of 2025. These divestitures aim to streamline operations in key segments, reduce debt and generate cash flow as fuel growth is achieved.
Headline earnings per share fell 37% to 716 cents, with base loss per share of 268C at 268C, including 531C losses due to decommissioned operations such as pending sales of AECI asphalt. AECI reported a 3.8% decline in revenue to R33.6 billion from continuing operations in 2024, as it affects AECI mining, which is primarily responsible for its revenue contributors through explosives and chemicals. Earnings before interest, taxation, depreciation and amortization from continuing operations fell 12.7% to Rs 30.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs 3.3 billion Rs
“We are pleased to announce that we are committed to providing a range of services and services to providing services that will help you with a wide range of services,” said Holger Riemensperger, CEO of AECI. “2024 was a transformational year for a group that made significant progress in their strategy execution program, making concessions that affected the group's financial performance that year.
In its outlook, AECI said, “2024 has set up a strong platform for the group to build and grow towards its strategic ambitions in 2026. In 2025, our attention will move from the strategic transition phase to the execution phase, with an emphasis on promoting hard cost savings, preparing for growth and focusing on free cash flow generation.
By maintaining the good performance momentum recorded in the fourth quarter of 2024, he said it continues to improve AECI mining and operational performance, investing in growth capital led by a capital allocation framework, and ultimately leading to the internationalization of its operations with AECI mining chemicals.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
