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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Codes of Good Practice on Black Economic Empowerment

Code Series 100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 100 : The General Principles for Measuring Ownership

9. Equity Instruments Carrying Preferent Rights


9.1) An Equity instrument carrying preferent rights is measurable in the same manner as an ordinary Equity Instrument.


9.2) An Equity Instrument carrying preferent rights that has the characteristics of a debt, regardless of whether the debt is that of an Enterprise or of a Participant, is an ordinary loan. If the debt is that of a black Participant, it may be subject to measurement under Current Equity Interest.


9.3) In evaluating an instrument that has a hybrid nature including the characteristics of a debt, only that portion that represents a debt will be measured under current equity interest. The remainder is measurable as an ordinary equity instrument.