Black-owned diversified financial services company Regiments Capital is to buy almost a third of B&W Instrumentation and Electrical, becoming its main broad-based black economic empowerment partner.
B&W, a niche provider of electrical and instrumentation services, and an earthing, lightning- and surge-protection specialist, said on Friday that it wanted to increase its empowerment shareholding and raise equity capital to position itself for growth.
Benefits expected to accrue to B&W include accreditation as a black empowerment supplier to the mining industry in terms of the Mining Charter.
Increased working capital will be used to finance growth in the company's traditional markets in South and sub-Saharan Africa.
B&W said it would also have better access to government, parastatal and state-funded markets because of its enhanced black equity.
Early last week, B&W released its financial results for the year to August in which it reported a return to profitability.
The group restructured its operations in the year to August, which involved improving governance and risk management, and implemented a five-year plan for performance improvement and growth.
Smaller industrial companies are restructuring amid reduced demand from mining and construction businesses.
Implementation of the state's infrastructure plan is still in its early stages.
Regiments Capital subscribed for 102155425 ordinary shares in B&W at 58c a share, representing an 11.1% discount on the 30-day volume-weighted average price on the date of the agreement. The issue will result in 32.5% of the issued share capital of B&W being held by Regiments for at least five years.
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