KBR SA Announces BBBEE Transaction

KBR (NYSE: KBR) announced today that its affiliate, Kellogg Brown and Root South Africa (Proprietary) Limited (KBR SA) has entered into a Broad-Based Black Economic Empowerment (BBBEE) transaction that is another step in KBR’s continuing commitment to the transformation of South Africa’s economy. Following the transaction, which is subject to obtaining certain regulatory approvals, the Kwande-Thesele consortium and a newly-formed Employee Stock Ownership Plan (ESOP) will own 25 percent+1 share of KBR SA in the aggregate under the terms of a long-term agreement.

KBR will continue ownership of 75% of KBR South Africa, and Kwande-Thesele will own a 19.9% share. The remaining 5.1% of KBR South Africa operations will be owned by the ESOP. The BBBEE transaction better aligns KBR SA with its customers and competitively positions KBR SA for long-term growth. The transaction also enables KBR SA to bring KBR’s broad range of high quality engineering, procurement and construction (EPC) capabilities to more customers in the region. Direct equity ownership by the Kwande-Thesele Consortium and the formation of the ESOP enhance KBR SA’s BBBEE rating, making KBR the leading engineering and construction contractor in South Africa in this regard, with an anticipated BBBEE rating at Level 4 or better. Increased employee retention is another anticipated benefit of the transaction, as the ESOP aims to give employees a direct stake in the success of KBR SA. The transaction is not expected to have any dilutive impact on KBR’s current year consolidated earnings.

“This sale reaffirms KBR’s and KBR South Africa’s long-term commitment to clients in South Africa,” said Dennis Calton, Executive Vice President, KBR Operations. “With some of the strongest BBBEEE credentials in the industry, KBR looks forward to expanding our offerings in the region to include minerals and mining; power; pulp and paper; and infrastructure and government opportunities, while maintaining a leading position in the hydrocarbons and chemicals market.”

Kwande-Thesele is a consortium consisting of established South African companies and individuals that have a proven track record in their areas of business and include broad-based participation by women organizations.

KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government services, minerals, civil infrastructure, power and industrial markets. For more information, visit www.kbr.com.

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