By Abdul Milazi
Sasol’s R28-billion broad-based black economic empowerment share scheme, to be officially launched on Thursday, could be a blessing for those who have cash, and a curse to those who don’t.
Sasol is offering black South Africans, including its employees, 63-million shares, or 10percent of total share capital, in the country’s single largest BEE deal to date.
According to the company circular from a recent shareholder meeting, black members of the public who do not have money to buy the stipulated minimum of 10 shares at R360 a share, can pay a minimum of R457.50 for 25 Sasol Inzalo shares, but would be locked in for 10 years.
These shares will be funded by Sasol and a number of local banks. Like all financed purchases, it will be like buying shares on loan.
According to Johan Koorts, an associate at specialist BEE deal makers Bravura Equity Services, those who opt for the funded shares might find themselves losers in the end should the share value drop.
“When the oil price comes down, Sasol’s share price will drop, but the value of the shareholders’ debt will not. They will find themselves owing more than what the shares are worth,” said Koorts.
He said the discounted price at 10percent of the March 23 trading price of R410 would work perfectly for those who could afford to buy them outright.
Those intending to buy for cash have already made a 38percent profit, before they have even bought the shares, as the Sasol share price closed at a record high of R514 per share on Thursday (before dropping to R496 at close on Friday), driven by the crude oil price rising to 130 a barrel and the rand weakening in the face of hate attacks on foreigners.
He said, however, that even those who bought for cash could not be guaranteed that Sasol’s share price would be at current levels at the end of the two-year lock-in period.
Black members of the public will be allocated 3percent of the 10percent stake, black business selected by Sasol 1.5percent, company employees 4percent, and the Sasol Inzalo Foundation 1.5 percent.
Shoaib Ahmed Vayej, BEE analyst at Sanlam Investment Management, said: “The use and extent of leverage is a very effective empowerment tool, especially for smaller investors subscribing for less than 100 shares. The offer will give participants the opportunity to participate in Sasol’s international businesses, including Sasol Synfuels International, Sasol Polymers business in Iran, Arya, Sasol Olefins & Surfactants, and Sasol Wax.”
Despite the 10-year lock-in, the funded shares may be sold after only three years, but only to black people.