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.