Group Five's BEE deal falls apart: Mike Upton - CEO, Group Five

June 18, 2009

ALEC HOGG: Mike Upton joins us now, chief executive of Group Five. Mike, the iLima Consortium - let's go back to 2005. It became one of the participants in a black empowerment transaction at Group Five, and there was an amount of R172m that was put into iLima through an enterprise development agreement. All of this is real complicated stuff, but that R172m presumably bought the BEE consortium about five million shares.

MIKE UPTON: Hello Alec, good evening. Ja, Alec, the original BEE deal was really iLima Group and Mvelaphanda that basically came together to acquire about 21.6% of the shares of Group Five, so this announcement really applies only to the iLima portion. They hold about 10.4m shares, which is about 8% of the stock. So in terms of the deal, as we have given out into the marketplace, over a period of time now we were trying desperately to help them to get to a position where they could refinance their operations, but unfortunately that wasn't to be, especially in terms of  the current market. So in terms of that agreement, effectively a default event has occurred and the issued share capital to iLima, those 10.4m shares, come back to Group Five.

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