Sasol shareholders okay R25,9bn BEE deal

Petrochemicals giant Sasol on Friday said its shareholders had approved its planned R25,9-billion black economic empowerment (BEE) transaction.

The world’s largest producer of oil from coal announced its intention to conclude a broad-based BEE ownership transaction in respect of 10% of its issued share capital in September last year.

In terms of the transaction, Sasol employees will hold 4%, the black public 3%, BEE groups selected by Sasol 1,5% and the Sasol Inzalo Foundation will hold the remaining 1,5%.

Sasol said in a statement to the JSE that the requisite majority of its shareholders had approved resolutions relating to the conclusion of the transaction at a general meeting.

“All resolutions were passed with a majority of not less than 97%,” Sasol said.

The transaction, involving 63,1-million Sasol shares, will be concluded as at March 18, when the company’s shares closed at R410.

This values the transaction at R25,86-billion, which was almost R8-billion more than the R17,9-billion the deal was initially worth on announcement in September last year.

Sasol’s share price has also climbed since, adding almost R80 a share since the end of March.

At Sasol’s closing price of R489,90 on the JSE on Thursday, the BEE deal is today worth a staggering R30,9-billion — the largest concluded in South Africa to date.

Seen as the conclusion of the deal, shareholder approval leaves only the registration of the special resolutions by the registrar of companies before the transaction is implemented.

As part of the transaction, Sasol will create two new classes of shares — Sasol Preferred Ordinary Shares and Sasol BEE Ordinary Shares.

These shares will be issued at R366 per share, which represents a discount of about 11% to the company’s closing share price on March 18.

Sasol ordinary shares to be issued in the transaction will be 34,7-million, or 5,5% of the company’s issued share capital.

The company will also issue 25,6-million Sasol Preferred Ordinary Shares, and 2,8-million Sasol BEE Ordinary Shares, directly to the black public.

Preferred Ordinary Shares will not be listed on the JSE but will carry a cumulative preferred dividend throughout the 10-year term of the transaction.

Sasol said this week that it expected its attributable earnings per share for the year to end-June 2008 to increase by 40% to 50% from the comparable previous reporting period, with headline earnings per share increasing between 50% and 60%.

But Sasol cautioned that the earnings guidance had not taken into account the non-cash charges resulting from the Sasol Inzalo BEE transaction.

A large portion of the non-cash charges are now expected to impact the company’s financial year 2009 earnings, instead of the previously expected current year’s earnings.

This is because the closing date for the black public invitations under the transactions retail offer has been extended to July 5 2008.

Ratings agency Moody’s said last month that robust current oil prices should allow Sasol enough breathing space to absorb any near-term leverage and liquidity pressures that may arise as a result of the BEE transaction. — I-Net Bridge

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Sherilee Bridge
Guest Author

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