TEBA Limited News

Should you wish to return to our news page please make use of the “Quick Links” bar on the right or use your web browsers back button.

11 November 2005: TEBA Development gets 10% of Verimark

TEBA Development is a long-established public benefit organisation active in rural development programmes throughout Southern Africa.

It is involved in a wide spectrum of rural assistance projects – including school building, water and sanitation projects in Southern Africa; skills developments and training programmes in rural communities; agricultural training and irrigation projects; and health and welfare projects across the country.

The R29m required to buy the 11,5 million shares involved in the transaction is being advanced to TEBA by the Verimark CEO Michael van Straaten in his personal capacity from the  Van Straaten Family Trust.

The loan to TEBA is to be repaid out of dividends. But, as Verimark has such a generous dividend policy – it is committed to paying a bi-annual dividend of approximately 80% of headline earnings – the deal is cash positive almost with immediate effect.

There is a second leg to Verimark’s black economic empowerment initiative. After a year, 4 million of the 11,5 million Verimark shares issues to TEBA will be hived off and placed in a Verimark Employees’ Trust so that Verimark staff members can also share in the benefits of the company’s increased prosperity.

While there is no immediate obligation on a direct marketing company like Verimark to become empowered, Van Straaten believes it was the right thing to do in the long term interests of the company.

“With the listing of a company like Verimark, and the kind of expansion programme we have in mind, we believed it was important to establish our black economic empowerment credentials right up front.
 
“Equally, we felt that it was important for us to partner with a development organisation such as TEBA because the grassroots nature of their activities will ensure that the broadest possible number of rural people will eventually benefit from its shareholding in Verimark.”

The MD of TEBA Development, David Cooper, said:

“This is a wonderful opportunity for TEBA Development to participate in the future growth and development of a strongly entrepreneurial company like Verimark and to use the proceeds to continue the valuable work we are currently doing in rural communities in the region. It is especially gratifying for us that through this transaction Verimark has demonstrated its recognition for the importance of rural development in Southern Africa.”