Petrochemicals giant Sasol is embarking on a new R21 billion Broad-Based Black Economic Empowerment (B-BBEE) share scheme called Sasol Khanyisa which comes after confirmation that its nine years old Sasol Inzalo scheme is flopping.
The proposed new deal, Sasol Khanyisa, will be submitted for shareholder approval at the Sasol’s AGM later this year,
The group said Sasol Khanyisa is intended to achieve effective direct and indirect B-BBEE ownership of at least 25% in Sasol South Africa, a wholly-owned subsidiary of Sasol.
The group said through two invitations eligible existing Sasol inzalo Groups and Public shareholders will receive bonus Sasol BEE ordinary shares (SOLBE1), that trade on the BEE segment of the JSE, at no cost to them. These bonus SOLBE1 and additional SOLBE1 shares issued to shareholders are tradeable from the date of issue, realising upfront and immediate value creation for shareholders.
“As a company proudly rooted in our South African heritage, we embrace transformation. We are committed to contributing meaningfully to sustainable transformation as we accelerate this journey across Sasol,” said Sasol’s Joint President and Chief Executive Officer, Bongani Nqwababa.
“In designing Sasol Khanyisa, we included several key design principles that would enable our objectives – specifically, to ensure that the transaction will deliver long-term value and lead to sustainable ownership of Sasol by Black South African shareholders,” said Stephen Cornell, Joint President and Chief Executive Officer.
Sasol emphasised that the success of the renewed deal is not depended on the performance of the Sasol share price. “As no external funding will be used, there will be no cash outflows from Sasol,” added Nqwababa.
Sasol said in February 2018, eligible participants will be invited to keep Sasol BEE Ordinary (SOLBE1) shares on the empowerment segment of the JSE and receive the following should they elect to keep the SOLBE1 designation:
- Receive one bonus SOLBE1 share for every four SOLBE1 shares owned; and
- Be invited to participate in Sasol Khanyisa.
Thereafter, in April 2018, eligible Sasol BEE Ordinary shareholders (SOLBE1) and Sasol Inzalo Groups and Public funded shareholders will be invited to participate in Sasol Khanyisa and receive the following:
- One Sasol Khanyisa Public share for every Sasol Inzalo share held; and
- One Sasol BEE Ordinary share for every 10 Sasol Khanyisa Public shares held.
These bonus SOLBE1 and additional SOLBE1 shares issued to shareholders are tradeable from the date of issue.
At the end of the 10 year period and once the vendor funding has been settled, Sasol Khanyisa Public shares will be exchanged for SOLBE1 shares listed the empowerment segment of the JSE. This will lead to long-lasting, unencumbered ownership of Sasol Limited by Black South Africans.
Participants in the Sasol Khanyisa employee share ownership plan will receive a debt-free share grant of Sasol ordinary shares and Sasol shares listed on the empowerment segment of the JSE worth R100 000. These shares, subject to taxation, will become theirs to keep or sell at the end of a three-year period, in 2021. Participating employees will also receive a pro rata portion of dividends received by the Sasol Khanyisa trust during the three-year period.
“To accelerate transformation, Sasol Khanyisa has been designed to empower Black employee participants with ‘rights to shares’,” said Cornell. These rights to shares, to be held in a trust, will be exchanged for Sasol shares listed on the empowerment segment of the JSE at the end of a 10-year period, after which employees will be able to freely trade these shares or retain them as Sasol shareholders.
The Sasol Inzalo Foundation will be renamed and will continue as a public benefit organisation.
Sasol Khanyisa’s ownership structure will be subject to shareholder approval later this year.