JSE-listed AECI will introduce a broad-based ownership scheme (BBOS) wherein public benefit organisation AECI Foundation, formerly known as the Tiso AEL Development Trust, will subscribe for a new class of ordinary shares (B Ordinary Shares).

The B Ordinary Shares will entitle the foundation to participate in the economic interest arising from the South African operations of wholly-owned subsidiary AECI Mining, comprising the AECI Mining Explosives and AECI Mining Chemicals divisions.

The transaction will result in the foundation holding an effective interest of 15.5% in AECI Mining.

AECI Mining is a provider of comprehensive mining solutions, specialising in the manufacture and supply of explosives, initiating systems, blasting services and mining chemicals, with a history spanning more than 100 years.

The implementation of the BBOS transaction is aligned with AECI's objective to improve AECI Mining's ownership from 41.9% to 51% black-owned in terms of the Codes, and 51% historically disadvantaged persons ownership in terms of the 2018 Mining Charter.

The Foundation is an existing Public Benefit Organisation with the primary objective of providing holistic development for orphans and vulnerable children in the communities located in the areas in which AECI Mining operates, and particularly in relation to education, food security, water and health.

Its activities include the care and counselling of, and the provision of education programmes to, abandoned, abused, neglected, orphaned or homeless children, as well as the promotion of community-based projects relating to self-help, empowerment, capacity building, skills development and poverty alleviation, AECI said in a statement.

The BBOS transaction has been valued at R522-million.

The cash contribution to the foundation from AECI Mining is equal to 35% of the consideration, and the related cash consideration payable by the Foundation for the subscription of B Ordinary Shares will have a net nil effect on the value of the net assets of AECI Mining.

Further, while a fairness opinion is not mandatory for the BBOS transaction, in the interest of transparency, the board resolved to obtain a fairness opinion, the company said.

AECI appointed professional services firm PricewaterhouseCoopers as the independent professional expert. It provided a fairness opinion concerning the BBOS transaction, in which it advised AECI that, in its opinion, the price at which the B Ordinary Shares are to be issued to the foundation is fair insofar as AECI shareholders are concerned.

The BBOS transaction will be effective on or about March 20, 2025, subject to the fulfilment of the conditions precedent.