The latest not-so-good news from Sasol Inzalo empowerment scheme have sent shockwaves across the country with worries that investors have lost their monies. Yes investors in this scheme have technically suffered some losses but the state of affairs is a bit complicated. Here’s an explanation of what it means.
Have I lost my money? Has the Sasol Inzalo BBBEE scheme collapsed?
No, the scheme has not collapsed. But it is underwater. This means that if it was to be liquidated today, with its liabilities will exceeding assets by about R2.1 billion, it will suffer a shortfall. It owes more than it is worth.
But Sasol has guaranteed to cover the shortfall at the point of unwinding the scheme next year.
Your Sasol Inzalo investment is safe but it will not give you a pay-out when the scheme comes to an end next year. But Sasol is promising to facilitate some gifts for the future via the new initiative called Sasol Khanyisa. Sasol Inzalo investors will get free Sasol Khanyisa shares.
What happens next? What must I do now?
Watch the news announcement from Sasol. As a Sasol Inzalo investor you are entitled to participate in the new scheme, R21 billion Sasol Khanyisa, they are proposing. Action will be required from you only next year.
Right now Sasol is preparing to take the proposed deal for approval to its shareholders in a general meeting to be held towards the end of 2017.
Who qualifies for the Sasol Khanyisa free offers?
There four categories in the Sasol Inzalo fold who will qualify for the Sasol Khanyisa free offers.
- Sasol Inzalo employee trusts participants
- Sasol BEE ordinary (SOLBE1) shareholders (Inzalo Cash)
- Sasol Inzalo Public funded and Sasol Inzalo Groups funded
- Sasol Inzalo Foundation
What are my options?
There will be different options for different classes of Sasol Inzalo participants.
The proposed options for Sasol BEE ordinary (SOLBE1) shareholders are as follows:
It’s important to remember that SOLBE1 shares were destined to become Sasol Limited shares at maturity. The Sasol Khanyisa offer brings a new dimension where SOLBE1 shareholders can elect not to convert into Sasol Limited shares but earn Sasol Khanyisa shares. There is an incentive to do so.
You will be deemed to have accepted the Sasol Khanyisa invitation unless you have indicated in writing that you do not wish to participate.
SOLBE1 shareholders who elect the Sasol Khanyisa avenue stand to gain the following for free:
- One share in Sasol Khanyisa Public for every one SOLBE1 share held
- One SOLBE1 share for every ten Sasol Khanyisa Public shares to be beneficially owned
The proposed options for Sasol Inzalo Public funded shares are as follows:
- One share in Sasol Khanyisa Public for every one Sasol Inzalo share held
- One SOLBE1 share for every ten Sasol Khanyisa Public shares held
The proposed options for Sasol Inzalo employee trusts beneficiaries are as follows:
The Sasol Khanyisa ESOP consists of two employee share ownership plans, one for Sasol Inzalo employee trust participants and the other for qualifying black Sasol employees.
Sasol Inzalo employee trust participants in the Sasol Khanyisa ESOP are black persons who are existing Sasol Inzalo employee trust participants. Subject to certain conditions, they will receive:
- R100 000’s worth of SOLBE1 shares or Sasol Limited shares
Other employees, who are existing Sasol Inzalo employee trust participants but who are not black persons will receive:
- R100 000’s worth of Sasol Limited shares.