JOHANNESBURG (Reuters) – FirstRand said on Wednesday it sold new and existing shares worth nearly 4.7 billion rand ($405.8 million) to be partly paid out to staff schemes at South Africa’s second biggest lender by value, weakening it’s stock price.
The bank’s shares fell 2.5 percent over stock dilution after the new issuance, at 0910 GMT, compared with a 0.8 percent rise by Johannesburg’s Top-40 index.
FirstRand said it had sold more than 102.1 million shares, 35.4 million of which were new. The remaining 66.7 million was existing stock belonging to its black empowerment scheme.
“Existing shares that were allocated to staff are being sold and new shares are being issued to normalise the NAV (net asset value),” Sam Moss, a FirstRand spokeswoman, said in an email.
FirstRand, which has a market value of $23.5 billion, said the new shares would be listed on Jan. 28, subject to stock exchange approvals.
In a similar move, financial services firm MMI Holdings, in which FirstRand has a small stake, sold 23.8 million of its own shares for 678.4 million rand ($58.6 million). Some 12.6 million of them were for its own staff scheme.
South African companies are required to meet targets on black ownership and hiring under the government’s policy of black economic empowerment, or “BEE”, designed to address the inequalities of the apartheid system that ended in 1994.
($1 = 11.5825 rand)
