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Sasol unveils BEE transaction
Sasol today announced that Tshwarisano LFB Investment (Pty) Ltd (Tshwarisano), its broad-based black economic empowerment (BEE) partner, would acquire a 12.5% interest in Uhambo Oil Ltd (Uhambo Oil) for an amount of R 1.45bn. The Uhambo Oil transaction is subject to Competition Tribunal approval.
Sasol is providing considerable facilitation and support for Tshwarisano`s financing requirements, which amount to about R1.1bn. Sasol has provided guarantees for this debt and has agreed not to recover guarantee fees, all of which will significantly lower Tshwarisano`s cost of borrowing. In addition, Sasol is contributing R45m to two trusts, aimed at empowering the severely underprivileged, as well as Uhambo Oil staff and their families. `These initiatives are aimed at reducing financing costs and improving the long- term business benefits that will accrue to Tshwarisano`s broad base of empowerment shareholders,` says Sasol CE Pat Davies. `Sasol views transformation in South Africa as a strategic business and moral imperative. We aspire to advancing our empowerment initiatives in ways that are sustainable, credible and of benefit to the Sasol group, all our stakeholders, and the country as a whole,` he adds.
This follows the joint announcement by Sasol and Petronas of Malaysia in November 2004 where the companies outlined plans to merge their respective liquid fuels businesses, subject to the approval of the competition authorities, into a large and robust joint entity to be named Uhambo Oil Ltd. The joint venture was proposed between the Sasol Liquid Fuel Business (previously Sasol Oil), and Engen, the Southern African fuel company controlled by Petronas. `After concluding and signing definitive agreements for this proposed merger, we have been able to advance our empowerment plans in the liquid fuels business. As a result, we are pleased to announce the formation of an empowerment partnership with Tshwarisano . Tshwarisano will acquire a 12.5% interest in Uhambo Oil, if the pending merger between our liquid fuels business and Engen is approved by the Competition Tribunal,` says Davies.
Other shareholders in Uhambo Oil will be Sasol and Petronas, both with 37.5%, and Petronas` empowerment partner Afric Energy Resources with 12.5%. Competition Tribunal hearings on the proposed joint venture take place next month. If, for any reason, the Competition Tribunal does not rule in favour of the merger, then Tshwarisano will become a 25% shareholder in Sasol`s liquid fuels business rather than a 12.5% shareholder in Uhambo Oil.
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