BLACK-owned diversified financial services company Regiments Capital is to buy almost a third of B&W Instrumentation and Electrical (B&W), becoming its main broad-based black economic empowerment partner.
B&W, a niche provider of electrical and instrumentation services as well as 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 to accrue to B&W as a result of the issue include accreditation as a black empowerment supplier to the mining industry in terms of the Mining Charter, which will help ensure the retention of existing work in the industry.
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 due to 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 had restructured its operations in the year to August, which involved improving governance and risk management, and set a five-year plan for performance improvement and growth.
Smaller industrial companies are restructuring amid reduced demand from mining and construction businesses for their services. The state’s infrastructure roll-out plan is still in its early stages.
Regiments Capital subscribed for 102,155,425 ordinary shares in the share capital of B&W at a price of 58 cents per share, representing a 11.1% discount to 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 Capital for at least five years.
Regiments Capital is involved in investment banking, advisory services and property development, and holds a portfolio of strategic investments in sectors such as infrastructure, healthcare and resources.