Old Mutual Bula Tsela empowerment deal paves the way for broad-based BEE

The financial services giant also has a community share scheme and an employee share scheme, and is issuing just more than 205 million shares – most of which will go to black South Africans. The bump-up in the company’s BEE ownership score is about 4%, and the implementation of Bula Tsela will take it to just under 33% black ownership.

Bula Tsela means “pave the way” in Sesotho. Black, coloured and Indian applicants can apply for a minimum of 200 retail scheme shares at a total subscription price of R2,000, payable upfront as a lump sum. Ten-percent of the retail part of the scheme will be set aside for applicants who cannot afford to pay the R2,000 upfront – they can apply for a maximum of 100 retail scheme shares at a total subscription price of R1,000, paying only R100 upfront, with the remainder payable over a 12-month period. 

Taskeen Ismail, head of corporate finance at Old Mutual, says applicants will have to decide on their own which offer they want to take up – either the R2,000 upfront or R1,000 paid over 12 months. 

Old Mutual cannot, however, guarantee that all applicants will be awarded the retail scheme shares that they apply for. Allocations will be decided at the end of the two-month application period, based on the number of shares available and the number of applicants. 

Ismail says there will be a weighting in favour of black women. A number of queries on the morning the offer opened were from parents and grandparents wanting to invest on behalf of their minor children and grandchildren. To do this, you will need an unabridged birth certificate of the minor and documentation to prove that both the minor and one parent are either black, coloured or Indian.

“There’s so much facilitation in the deal that if you invest in the R2,000 bucket, that’s only 15% of the value of what you’re getting, and we match whatever you put down with a cash donation on our side. The other 70% is preference share funding,” Ismail says. 

So, the retail scheme wants to buy about 63 million Old Mutual shares at R800-million. R120-million comes from participants, R120-million comes from Old Mutual itself as a donation or contribution, and the remaining R560-million is preference share funding from Old Mutual, which will have to be paid back – which is why there is a lock-in period.

• The Imfundo Trust: Old Mutual Investment Group’s scholarship initiative that aims to provide funding for disadvantaged students with a particular interest in the investments industry.


• Customised funding solutions to black-owned small businesses, either for asset finance, working capital, or both, through the Masisizane Fund.


• The successful conclusion of the sale of a 21% stake in Futuregrowth Asset Management to African Women Chartered Accountants Investment Holdings to increase the pool of black women chartered accountants in South Africa while growing black ownership in the financial services sector.