JSE-listed Sasol has announced a proposed new R21-billion broad-based black economic empowerment (BBBEE) ownership transaction, Sasol Khanyisa, which will replace Sasol’s debt-ridden Sasol Inzalo fund, which expires in June 2018.

When Sasol Inzalo lapses, it will not be able to distribute shares to participants, given the closing Sasol ordinary share price of R389 on September 4.

Sasol joint president and CEO Stephen Cornell told Engineering News that Sasol has learned that it is very important to set up an empowerment programme that will be able to service any debt that is required, as well as minimise any global risks that can influence the outcome of the transaction.

“Inzalo assumed that the share price appreciation would cover some external debt. Fluctuating oil prices and the rand:dollar exchange rate changing was one of the reasons we were not able to transfer as much value as we had assumed,” he said.

Cornell added that Sasol Khanyisa’s success is less dependent on Sasol’s share price and there would be no external funding, which meant there would be no cash outflows from Sasol.

Sasol Khanyisa is intended to achieve effective direct and indirect BBBEE ownership of at least 25% in Sasol’s wholly owned subsidiary, Sasol South Africa.

In February 2018, eligible participants will be invited to keep Sasol BEE ordinary shares (SOLBE1) on the empowerment segment of the JSE and receive one bonus SOLBE1 share for every four SOLBE1 shares owned, as well as be invited to participate in Sasol Khanyisa.

Thereafter, in April 2018, eligible SOLBE1 and Sasol Inzalo groups and public-funded shareholders will be invited to participate in Sasol Khanyisa and receive one Sasol Khanyisa public share for every Sasol Inzalo share held and one Sasol BEE ordinary share for every ten Sasol Khanyisa public shares held.

“We are committed to contributing meaningfully to sustainable transformation as we accelerate this journey across Sasol,” said joint president and CEO Bongani Nqwababa.

He added that eligible participants in Sasol Khanyisa would comprise Sasol’s qualifying employees, existing Sasol Inzalo public and group shareholders, and existing black Sasol shareholders who owned shares listed on the empowerment segment of the JSE.

Participants in the Sasol Khanyisa employee share ownership plan would receive a debt-free share grant of Sasol ordinary shares and Sasol shares listed on the empowerment segment of the JSE worth R100 000.

These shares, subject to taxation, would become theirs to keep or sell at the end of three years, in 2021.

Participating employees would also receive a pro rata portion of dividends received by the Sasol Khanyisa trust during the three-year period.

“To accelerate transformation, Sasol Khanyisa has been designed to empower black employee participants with ‘rights to shares’,” said Cornell.

These rights to shares, to be held in a trust, will be exchanged for Sasol shares listed on the empowerment segment of the JSE at the end of a ten-year period, after which employees will be able to freely trade these shares or retain them.

The Sasol Inzalo Foundation will be renamed and will continue as a public benefit organisation, driving excellence in science, technology, engineering and mathematics education at all levels of the education value chain.