RMB advises Oceana Group on new BBBEE transaction

The challenge

The Oceana Group is a global fishing company and an important participant in the South African, Namibian and US fishing industries. The company is ranked as one of the top 20 seafood companies in the world by market capitalisation and is a black-owned company and level 1 BBBEE contributor. Over the past five years, Oceana has consistently been rated as one of the most empowered JSE-listed companies.

As part of Oceana’s longstanding commitment to promote BBBEE in South Africa, it embarked on a replacement BEE transaction for employees and strategic stakeholders, as Oceana’s existing Oceana Empowerment Trust commenced its unwinding process in January 2021.

RMB solution

RMB acted as financial adviser in the R570million BBBEE transaction that will broaden equity ownership among Oceana employees and strategic partners. RMB’s corporate finance expertise in BEE transactions enabled us to find the optimal structure for Oceana’s new empowerment transaction.

The transaction was funded through notional vendor financing provided by Oceana at a highly cost-effective funding rate, over a 10-year period. All current employees can now be included in the new empowerment transaction, which will have an equal allocation of rights to all employees.

The transaction included the repurchase of Oceana shares held by the Oceana Empowerment Trust (OET) in order to mitigate against the dilution of existing Oceana shareholders as a result of the share issue for the new BEE transaction.

Client benefit

All eligible employees will receive the same number of rights in a trust holding 6.0% of Oceana’ issued shares in the new 10-year transaction term, with equal vesting in years 8, 9 and 10, regardless of the length of service or level of seniority within the Oceana Group. Eligible strategic stakeholders will participate on a similar basis in a separate trust, holding 0.5% of Oceana’s issued shares. Oceana can now continue to promote empowerment for its employees and key strategic partners, and protect and optimise its commercial fishing rights, which a key strategic imperative for Oceana.