OCEANA GROUP CONVERTS FISHING RIGHTS INTO SHARED VALUE WITH MULTI-MILLION RAND PAYOUT

.

[Cape Town, April 3, 2014] – South Africa’s leading empowered fishing company, Oceana Group, will pay out R289-million to employee beneficiaries of the Oceana Empowerment Trust, as value created through harvesting fishing rights is unlocked and converted into shared broad-based value.

In 2006, Oceana established an employee share ownership scheme, the Oceana Empowerment Trust (the Trust), for the purpose of acquiring a significant equity interest in Oceana and to hold the shares for the economic empowerment of eligible employees. The Trust was intended to operate for the benefit of black employees, who are South African citizens and who are permanently employed or employed as permanent seasonals within Oceana. Currently the Trust has 2 650 beneficiaries, who are located across the country at various operating locations. With its 11.7% shareholding in Oceana, the value of the Trust has increased significantly since its establishment. At March 2014 the market value of the shares owned by the Trust was just over R1.2billion.

The wide geographic spread of these employee beneficiaries ranges from Lamberts Bay and Doring Bay in the Northern Cape, to St Helena Bay, Cape Town, Hout Bay in the Western Cape, as well as Port Elizabeth, Durban and Johannesburg. The payout will not only benefit the employee beneficiaries but will contribute to improving the livelihood of their families and communities. It will also translate into a significant contribution to the local economy in areas mainly reliant on fishing activities.

Oceana Group CEO, Francois Kuttel, said it was a source of great pride to all in the company that the money was being handed over to black employees who were now “authentic stakeholders and not simply passive shareholders in South Africa’s formal economy”. This indeed resembles the unlocking of value created through harvesting fishing rights into shared value.

Speaking at the press conference, the Minister of Agriculture, Forestry and Fisheries, Ms Tina Joemat-Pettersson said, “When government started talking about transformation in the fishing industry, some among us reacted with steely coldness. It was an unpopular move to mix ‘corporate business’ with ‘transformation’ in one sentence, almost like forcing companies and society in general to do something that went against the grain. Today we are here to witness just how possible it is for us to truly transform, and by true transformation, I mean the full participation of workers and ordinary fisherfolk in the fishing industry and, especially the sharing of wealth and profits with workers”.

The payout which will see workers receiving on average, R100 000 after tax each, comes after more than 75% of beneficiaries voted on a resolution last year to approve an extension of the lock-in period for the employee share trust. This positive result demonstrates a clear vote of confidence by beneficiaries in the company and its ability to continue to create value in the future.

At the end of the lock-in period in 2021, beneficiaries who hold participatory rights in the Trust will be able to convert these rights into shares.

Speaking at a press conference held in Cape Town to announce the handover, Kuttel said that Oceana had proved it was a worthy and reliable recipient of fishing rights. “We are witnessing some of the benefits that flow to those employees as a consequence of their participation in the Trust.” Oceana has been rated by an independent economic empowerment agency as a black-owned and controlled company with commendable empowerment credentials. Oceana has been rated as a Level 2 B-BBEE contributor since 2011, with a score of 95.17 out of 100 points.

The Oceana Group provided the Trust with the required funds to buy shares in 2006. Since then, there have been three allocations of rights to eligible employees to allow new and eligible Oceana employees to become participatory rights holders in the Trust. Since its formation in 2006, 2 650 employees have been awarded participatory rights, translating to 14,2 million shares in Oceana, positioning the trust as a major shareholder in Oceana Group.

The company has had positive growth since the Trust was established, which can be attributed to the dedication and commitment displayed by all employees. Oceana’s share price has also shown remarkable growth from R15.21 in 2006 to R87.87 as at the 30th March 2014, reflecting the significant value created for our black employees through the Trust.

The payout represents approximately 25% of the current value in the trust and affords beneficiaries the ability to realise this value tangibly, at a time when all South Africans are feeling the pressure of tough economic times.

In addition to the early payout, beneficiaries will receive a distribution equal to 50% of the dividend received by the Trust from Oceana Group, from July 2014 until the end of the new lock-in period in 2021, when beneficiaries will be able to convert their rights into shares after any remaining capital contribution in the Trust has been settled. This will result in beneficiaries receiving a distribution payment twice a year.

As a responsible employer, Oceana Group together with the Trust committed to ensuring the financial wellbeing of their staff through providing financial education training during January, February and March this year, focused on teaching everyone how to best manage their finances. Various investment houses were also invited to be present at an open day to provide guidance to beneficiaries to ensure that sound financial decisions are made.

NOTES TO EDITORS

The story in numbers:

  • 2,650 eligible employees to benefit
  • 45 % are female
  • 79% are under the age of 50
  • 161 above age 60
  • R74 million will be paid to SARS in respect of personal tax due

Question and Answers:
When is the next pay-out date and what is the value expected to be?
We have not planned a further payout at this stage. In 2021 rights held by beneficiaries will be converted into shares and beneficiaries will have the option of selling these on the open market or retaining the shares. The value of the Trust’s shares will be based on the prevailing market price of the Oceana share.

Why was the Oceana Empowerment Trust originally set up?
Oceana has supported the government’s B-BBBEE initiatives and, in line with its commitment to transformation, the Trust was set up to allow employees to share in the wealth of the company. Through adhering to government’s policies on transformation and broad-based economic empowerment we sought to empower those who were previously disadvantaged and let employees enjoy the economic benefits generated through their own hard work.

Were employees given financial advice?
A leading financial institution has run financial education training sessions across the Group, aimed at teaching staff how to best manage their finances. Key messages to beneficiaries have been to understand the importance of sound financial planning and to be mindful to settle expensive debt. In addition, various investment houses were invited to be present at an open day for staff. We have also encouraged staff to use the existing employee assistance programme offering counseling and advice for staff and their families on many issues, including financial guidance.

Was the new lock-in period set to make sure that black shareholding was retained for the period in which new long term rights will be issued?
Extending the lock-in period will secure the Oceana Group’s black ownership status beyond the 2020 long-term rights renewal process, which will allow the company to be competitive in the process of securing fishing rights. This will enable the company to continue running the business and to grow the value held by all shareholders.

Did only black employees benefit?
Black permanent and permanent seasonal employees who are South African citizens were eligible to receive participatory rights to share in the wealth of the Trust.

For more information or interviews, please contact Corporate Image:

Lauren Cohen
lauren@corporateimage.co.za
083 999 2560
021 4261233