R/€ = 13.04
R/$ = 12.07
Au 1204.60 $/oz
Pt 1170.50 $/oz
Sep 23, 2005
Sasol sells 12,5% in Uhambo to BEE groupBack
© Reuse this Synthetic fuel producer Sasol has sold an effective 12,5% in Uhambo Oil - its proposed liquid-fuels joint-venture firm with Petronas - to black economic-empowerment (BEE) consortium Tshwarisano for R1,45-billion, it said yesterday.
Uhambo Oil, which will comprise a 50:50 merger between Sasol's Liquid Fuels business (ex-Sasol Oil) and Petronas's local subsidiary, Engen, is subject to approval by the Competition Tribunal, although Sasol CE Pat Davis said yesterday that the merger had received a favourable recommendation from the Competition Commission.
As a result of the empowerment transaction, Uhambo Oil will boast a 25% BEE shareholding, as Engen also brings Africa Energy Resources, also with a 12,5% stake, to the table, and Sasol and Petronas will each hold 37,5%.
Davis said that, should the merger not receive competition approval, Tshwarisano would become a 25% shareholder in Sasol's liquid fuels business on its own.
He said that Competition Tribunal hearings into the merger will begin early next month and are expected to continue for about three weeks.
Davis said that Sasol had, from the outset, striven to ensure that the empowerment deal included 'meaningful participation' of broad-based groups.
The BEE consortium is led by former Minerals and Energy Minister Dr Penuell Maduna, Ruel Khoza and Hixoni Nyasulu, who hold a collective 30,1% of equity in the Tshwarisano consortium.
The remainder is belongs to women (54%), an Uhambo employees' trust, a rural-community trust and a group of previous shareholders in Exel, Sasol's BEE fuel retail business, which include the Autoworkers provident and pension funds and a rural-women-upliftment trust.
In all, some 150 000 new shareholders will benefit from the deal.
Davis said that Sasol had contributed some R1-billion to facilitating the deal, including a R45-million equity payment to two trusts, aimed at empowering the severely underprivileged and the Uhambo staff.
It has also provided guarantees to the R1,14-billion senior debt and has agreed not to recover guarantee fees.
In a response to shareholder misgivings over whether value was being lost through the empowerment transaction, Davis said that he was confident that the deal would prove to the long-term benefit of shareholders.
Sasol's liquid fuels business's operating profit rose by 33% to R1,9-billion in the 2005 financial year to end-June, driven mainly by higher refinery margins.
If it receives competition authority approval, Uhambo Oil will be South Africa's largest liquid fuels company, with 48% of the country's refining capacity and 34% of retail market share.
Edited by: Liezel Hill© Reuse this Comment Guidelines (150 word limit)
Other Oil and Gas News
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...