Cape Town - Petrochemicals group Sasol will give R1 billion in financial support to its new black economic empowerment (BEE) partner, Tshwarisano, as part of a R1.45 billion equity deal unveiled yesterday.
The deal underpins the proposed merger of Sasol's and Engen's liquid fuel businesses to form Uhambo Oil, a fuel giant with 48 percent of South Africa's refining capacity and 34 percent of its retail sales.
Sasol and Engen, owned by Malaysia's Petronas, will each hold 37.5 percent of Uhambo, while Tshwarisano and Worldwide Africa Investment Holdings, Engen's BEE partner, will each have 12.5 percent.
Tshwarisano is to pay R1.45 billion for its stake in Uhambo, which is valued at R14.2 billion.
In the event competition authorities veto the Uhambo deal, Tshwarisano will take a 25 percent stake in Sasol's liquid fuels business. The Uhambo matter is due to be heard by the competition tribunal in early October.
Tshwarisano is a broad-based consortium led by former justice minister Penuell Maduna. Its beneficiaries were made public for the first time yesterday, with women representing about 54 percent.
Sasol deputy chief executive Trevor Munday said: "This has got to be one of the most broad-based empowerment transactions this country has seen."
Sasol was criticised by the government earlier this year for its slow pace of transformation, but the relationship appears to be on the mend.
Munday highlighted the "innovative" financial structure of the deal, which aimed to ensure benefits flowed to beneficiaries within a reasonable time. Tshwarisano's debt of R1.1 billion will be paid off in about seven years, and is being arranged by Sasol Finance, JP Morgan and Nedbank.
Sasol would support and facilitate the deal by, among other things:
- guaranteeing Tshwarisano's debt, thus lowering its borrowing costs by about R450 million;
- waiving R170 million in guarantee fees; and
- paying advising, arranging and structuring fees of R80 million to Tshwarisano's advisers.
"The Sasol guarantee means that the banks will lend to Tshwarisano at about the same rate that they would have lent to Sasol," said Hixonia Nyasulu, who, together with Maduna and former Eskom chairman Reuel Khoza, will own about 30 percent of Tshwarisano.
Nyasulu was described in a 2003 empowerment survey as the most influential BEE woman director on the JSE for her place on the boards of Anglo American, AECI, Nedcor, Retail Apparel Group and Tongaat-Hulett.
The remaining 70 percent of Tshwarisano will be held by PulaNala, a Mpumalanga-based consortium of black-owned associations; Lelethu Energy and Mineral Group, comprising black-owned organisations in the Eastern Cape;
Tswelopele Mineral and Energy Holdings, which includes various black-owned groups, among them a Cosatu investment company;
Amandl'Embokodo, a women's consortium with about 250 000 indirect beneficiaries; and previous shareholders of Exel, Sasol's former BEE partner.
The Exel shareholders will hold about 47 percent of Tshwarisano. They include women's group Nozweni; the car workers' provident and pension funds with 145 000 members, mainly workers at retail fuel service stations; and Phakisang Investments, previous long-serving shareholders in Exel with investments in service stations.
Sasol said it would contribute R45 million to two trusts aimed at empowering the "severely underprivileged" as well as Uhambo staff and their families.
Sasol shares closed 2.3 percent higher at R230.15 on the JSE yesterday, while the JSE/FTSE Top40 index was 1.3 percent lower.