In terms of the agreement Sinopec-owned OIHL HK will acquire a 75percent interest in CSA. However, the Tribunal’s approval of the merger does not bring the matter to finality as Sinopec cannot conclude the transaction because CSA’s previously disadvantaged minority shareholders Off The Shelf Investments Fifty-Six (OTS) must exercise a right of first refusal. OTS owns 25percent of CSA.
CSA on Friday confirmed that OTS had filed a separate transaction with the Competition Commission for the Chevron assets.
“CSA has been advised that the Competition Tribunal of South Africa has approved Sinopec’s proposed acquisition of Chevron Global Energy shares and related interests in CSA.
"However, Sinopec cannot yet conclude the transaction as the transaction is subject to the right of first refusal held by the minority shareholders of CSA and other conditions precedent.
"The minority shareholders’ proposed transaction is currently proceeding before the Competition Commission of South Africa,” said CSA spokesperson Jill Koopman on Friday.
The commission’s spokesperson Sipho Ngwema on Friday also confirmed that the body had received OTS’s application. CSA's assets include a 100000 barrel-a-day crude oil refinery in Cape Town, a lubricants plant in Durban, 820 petrol stations, oil storage facilities and 220 convenience stores operating in South Africa and Botswana.
OTS’s exercise of their pre-emptive right to buy the other 75percent has opened the door for Anglo-Swiss multinational commodity trading and mining company Glencore to lay its hands on the Chevron assets. In a statement in October last year, Glencore said it had entered into an agreement with OTS to acquire the assets. Glencore said during the acquisition process it would support OTS as their technical and financial partner. The multinational said the assets provided an attractive downstream opportunity for its oil business.
One of the outstanding conditions of the Sinopec/Chevron transaction is Sinopec’s investment of R6bn in the Cape Town refinery over a five-year period.
Sinopec has also undertaken to ensure that CSA would bear the full costs of rebranding of certain service stations to the Sinopec brand.
Other conditions are that Sinopec would ensure CSA would not change any of the existing contracts with the branded marketers that would be to the detriment of the branded marketers.
The parties also agreed that there would be no retrenchments as a result of the proposed transaction. CSA must continue to meet any ongoing contractual obligations in terms of its retired employees.