WAMBUI CHEGE, Johannesburg | Wednesday
SHELL South Africa and Thebe Investment said on Tuesday they had concluded a deal in which Thebe, a black empowerment firm, acquired a 25% in Shell’s downstream marketing business.
The deal, which was first announced in July 2001, is in line with the South African government’s aim of securing 25% black ownership in all sectors of the local fuel industry in the next eight years.
”This is a very important milestone for black economic empowerment. We will continue to push the charter (for black empowerment) in all areas and hope we will end up with a normalised oil industry,” said Errol Marshall, Vice President for oil products at Shell South Africa, a unit of Royal Dutch/Shell.
The firms did not disclose the value of the deal.
Under the complex arrangement, Shell South Africa has been restructured into two companies. Shell South Africa Energy Ltd is responsible for upstream development including refining.
Shell South Africa Marketing, in which Thebe acquired a 25% stake, is responsible for retail marketing, distribution, network, commercial fuels, liquefied petroleum gas, aviation, marine, lubricants and bitumen.
In exchange, Thebe sold its oil subsidiary Tepco Petroleum to Shell, making it a wholly-owned subsidiary of the oil giant.
The combined Tepco-Shell will be the second largest petroleum business in South Africa with an estimated 22% market share after local refiner and retailer Engen, which is part-owned by another black company Worldwide African Investment Holdings.
South Africa’s competition authorities approved the deal in February on condition that Tepco continued to exist as a brand in the market.
Tepco was the country’s first black-controlled firm petroleum firm formed in 1994, the year white minority rule in South Africa ended.
Both firms are due to start negotiations within the next year over Thebe’s entry into Shell’s refinery business.
Part of the financing for the Thebe/Shell deal was provided by South African retail bank Nedcor through a medium term special purpose vehicle, Nedcor officials said. – Reuters