JOHANNESBURG (Reuters) - South Africa's largest retail bank Absa Group Ltd said on Thursday it will provide back up funding for its empowerment partner, Batho Bonke, to convert its preference shares to ordinary shares. Batho Bonke, which is led by politicians and businessman Tokyo Sexwale and is 44.7 percent owned by Mvelaphanda Group, has the option to convert 73.1 million shares into ordinary shares by June 1. The option exercise represents the second phase of the Black Economic Empowerment transaction announced in July 2004, whereby Absa sold 10 percent of its equity, representing 73.1 million option-holding preference shares, to Batho Bonke South African companies must meet targets on black ownership, management and procurement as part of a government drive to shift more control of the eocnomy into the hands of the black majority. As part of the transaction, Absa would buy back and cancel 49.9 percent of options holding shares held by Batho Bonke and issue 36.6 million ordinary shares to Batho Bonke. Absa said the deal will unlock 2.2 billion rand in value for Batho Bonke, assuming an Absa share price of 100 rand. Batho Bonke will retain a 5.1 percent equity interest with voting and economic rights in Absa as well as a seat on the board. "The buyback optimises the value realised by Batho Bonke by ensuring the sale of a substantial portion of Absa shares at market-related prices," said Absa chief executive officer Maria Ramos. | 
