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Massmart staff receive fifth empowerment dividend payout

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A dividend of 189 cents, equivalent to 75% of the Massmart ordinary dividend per share, was paid into Massmart’s Thuthukani Staff Empowerment Trust on Monday 23 March 2009. A total dividend payout of R17,732,929 will be made to Thuthukani beneficiaries with their April salaries. The average dividend paid per participant is R2,378. Individual dividend payments vary, from R850.50 to R4,914.

Participants have earned a total of R59,703,904 in dividends since the first payout in April 2007. Dividends are payable in April and October.

Shares were originally issued to the Thuthukani Trust at R49.98 and with the Massmart share price currently trading at R73.63, beneficiaries will have seen capital growth of 47%. The current value of the 18 million shares issued in October 2006 is estimated at over R1,3-billion.

“Notwithstanding the difficult economic environment, our BEE scheme continues to deliver good returns for participants, who represent a significant percentage of our shareholder base,” says Massmart CEO Grant Pattison.

Thuthukani participants earned 25% of the Massmart ordinary dividend per share in 2007 and 50% in 2008. The payout is currently at 75% of the dividend and from 2010 participants will be entitled to the full dividend. Staff were originally issued shares in the Trust based entirely on their length of service with the Massmart Group. Black permanent employees, currently own 8.2% of Massmart shares in the Thuthukani Trust.

ENDS

Media release issued by:

Brunswick Group LLP – 011 502 7300
Cecilia de Almeida
083 325 9169
Julia Scheffer
082 802 4265

Media queries should be addressed to:

Brian Leroni
Group Corporate Affairs Executive
Massmart Holding Ltd
011 517 0000

Notes to Editors

About Thutukani Empowerment Trust

Massmart’s BEE transaction was implemented by the group on 1 October 2006. The transaction involved placing 18 million shares representing approximately 9% of Massmart’s equity in trust for the benefit of Massmart’s permanent staff.

The BEE Transaction included the setting up of two trusts: the Thuthukani Empowerment Trust and The Black Management Trust.

The beneficiaries have vested rights that are similar to those of existing Massmart shareholders, including voting rights, the right to earn dividends and to earn a capital profit by selling their shares in the future. The Thuthukani Empowerment Trust has nine trustees, of which four are elected by the beneficiaries, four are appointed by Massmart and one person is an independent previously disadvantaged professional who may be elected by the trustees to act as chairman of the trust. The majority of the trustees are previously disadvantaged individuals.

At a high level, the Thuthukani Empowerment Trust operates as follows:
Massmart issued “A” Preference Shares to the Thuthukani Empowerment Trust; the number of “A” Preference Shares allocated to beneficiaries of the Thuthukani Empowerment Trust was based on length of service with the Group.

At the end of years four, five and six (being 1 October 2010, 2011 and 2012, respectively) 33.3% of the “A” Preference Shares will become available to the beneficiaries, who may then elect to receive the benefits flowing from these newly available “A” Preference Shares. If the beneficiary makes no election, the “A” Preference Shares will be held until the scheme comes to an end (at the end of six years), when an automatic election will be deemed to occur. When the employee elects to receive his benefit, then he will receive ordinary shares with a value equal to the difference between the price of an ordinary share at the time of his election and the reference price (being R49.98) multiplied by the size of his allocation.

Dividends are paid in cash into the beneficiaries’ bank accounts within a few weeks after the declaration of Massmart’s ordinary dividend. The trust is once-off and will be wound up in or about 2013. Any undistributed “A” Preference Shares will then be distributed to beneficiaries, while any forfeited or unallocated “A” Preference Shares will be redeemed.

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