The deal represented the first stage of its transformation strategy, Pangbourne said, and had been structured to ensure that it was non-earnings dilutionary for existing holders of its combined units.

Pangbourne said it would issue 12.38 million new combined units to Panya Investments, its wholly owned subsidiary, for a consideration of R125-million.

The price represented a five percent discount to the 30-day volume-weighted average price per combined unit from the date of the transaction's approval by the Pangbourne board, after deduction of the distribution payable to unitholders, in which Panya would not participate.

To avoid dilution of the distribution to its unitholders, Pangbourne would also claw back from Panya the distribution for the period July 1, 2005 to the data of issue of the subscription units, calculated on a pro-rata basis over the six months ending December 31, 2005.

The subscription price would be funded by Absa Bank, while Yard Capital would contribute R5.0-million on its own account.

Pangbourne would then sell all of the issued shares in Panya to Yard Capital for a consideration of R999, the par value of the sale shares. On implementation, approximately 6.15 percent of the Pangbourne combined units in issue will be under the control of Yard Capital through its interest in Panya.

Yard Capital had agreed to hold the shares for a fixed period of time, and security for the Absa funding would be provided by pledging subscription units to the bank. Pangbourne would also grant Absa a limited recourse suretyship and mortgage bonds in favour of Absa would be registered over certain properties owned by Pangbourne to the value of R148-million.

Yard Capital is a BEE investment company whose shareholders include RMB Private Equity (20 percent), while Leslie Maasdorp (the non-executive chairperson), Irene Charnley (a non-executive director), Lumkile Mondi (a non-executive director), and Yogesh Narsing and Lizwi Mtumtum (both executive directors), collectively hold 58 percent interest.

The balance of Yard Capital's shares is set aside in trust for future management and a broad based charitable trust, the Yard Capital Development Trust.

Yard Capital's current investments include a 30 percent interest in Fujitsu Services and a 6.75 percent interest in Sani-tech, a provider of portable toilet hire and hygiene sanitation services with a dominant share of the market. Yard Capital would have a central role in the further development of Pangbourne's transformation strategy, the group added.

The transaction is subject to several conditions precedent, including Pangbourne shareholder approval. Shareholder meetings are scheduled for November 8.