The Public Investment Corporation has welcomed the Competition Tribunal's judgment in favour of the Government Employee Pension Fund's proposed takeover of cement producer AfriSam.
The corporation, which represents the fund, confirmed that it has now received all the regulatory approvals it needs to convert its preference shares into ordinary equity and call for redemption of the fund's preference share debt from Bunker Hills and related parties.
The corporation announced that it had reached an agreement with most providers of senior debt to AfriSam in relation to the proposed restructuring of it s debt. The restructuring will result in a debt reduction in excess of R15-billion.
The agreed restructuring has the support of over 85% of creditor s.
The restructuring agreement follows a court order issued on December 2 confirming the corporation's rights to convert its preference shares into equity.
In terms of the agreement, Pembani Group, (formerly Worldwide African Investment Holdings), the largest creditor, will convert a large portion of its debt into equity and the remaining senior debt of about R4.2-billion will be rolled into new notes that will mature at the end of April 2013 or 12 months after the implementation of the restructuring.
The corporation will also fund AfriSam with substantial equity and/or subordinated debt.
The resulting capital structure, it is said, ensures AfriSam's operational flexibility, removes currency volatility and creates the opportunity for management to consolidate the company's commercial strengths, thereby saving jobs and protecting a vitally important player in South Africa's infrastructure sector.
The corporation's CEO, Elias Masilela, said: "Our core intention is the preservation of almost 2000 jobs AfriSam provides, as well as ensuring the protection of competition in the country's cement industry."
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