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IT group AYO has revealed the details of its confidential settlement with the Public Investment Corporation (PIC), saying it will repurchase R619 million in shares from the Government Employees Pension Fund (GEPF) and grant it two seats on its board.
On 24 March, AYO reached a deal with the PIC behind closed doors, abruptly ending a court case that still had at least two weeks to run. The PIC invests on behalf of the GEPF. AYO is an indirect subsidiary of Iqbal Survé's Sekunjalo Investment Holdings
The IT group and the asset manager had declined to disclose any details since the deal was clinched nine days ago, citing confidentially clauses.
But on Monday morning AYO changed tack, saying it had agreed to repurchase just over 17 million shares from the GEPF for R619 million as part of the deal. Following the repurchase, the GEPF will retain a minimum shareholding of about 25% in the IT group.
The R619 million AYO has agreed to pay the GEPF is far less than the R4.3 billion claim (excluding interest), that the PIC and GEPF had gone to court to claw back.
The pension fund also has the option to sell a further 5% of AYO's shares after three years at least R20, or a higher figure based on the value of the shares at the time. AYO shares are currently trading at R4.65.
Click here for details on AYO's shares as well as other info.
AYO said that the pension fund would also be entitled to nominate one director for every 10% of the shares in holds in AYO.
And, for as long as the GEPF holds no less than 15% of the shares in AYO, the board chair will be appointed with the GEPF's approval.
Why the change?
The IT group said decided to publish the details of the deal following an article in Daily Maverick on 25 March, which disclosed the settlement terms.
In a later media statement AYO added that the decision to disclose the details was informed by the need to comply with JSE listing requirements.
"AYO will not entertain any further media questions around the settlement agreement, as it is now focused on growing its business and repairing the years of damage inflicted on it by factually flawed media reports," it said.
The IT group had also come under fire from the Public Servants Association, which said last week it had briefed its lawyers to file a freedom-of-information request to access the settlement.
*Correction: This article's headline has been updated to remove the word 'only'. The GEPF will retain 25% of AYO's shareholding once the R619 million share sale has been completed.
