The dti welcomes Sasol BEE deal 14 September 2007
The Department of Trade and Industry (dti) welcomes the announcement by Sasol Ltd of the broad outlines of a black economic empowerment (BEE) deal. The deal, which will see 10% of Sasol sold to broad-based empowerment groups, will be largest-ever BEE deal in the South African economy, worth some R18 billion based on Sasol's market capitalisation.
Sasol is already one of the largest South African multinationals, with mining and energy operations across all continents. It is also the largest industrial investor in the South African economy. In the department's view, it is only appropriate that such a company should be one of the champions of black economic empowerment and other forms of transformation in the economy.
While we await the final details of the transaction, it appears to be broad-based in nature and will include, inter alia, the participation of black women, co-operatives, black suppliers and customers, black youth, the facilitation of new entrants into the industry, and a proposed Employee Share Ownership Scheme (ESOP). The involvement of the Sasol Foundation, which seeks to produce critical skills in Engineering, Science and Technology, is also exciting, and indicates that the company has adopted a long-term view to empowerment. In these aspects, we believe that Sasol's proposed BEE deal is broadly in line with government's codes of good practice for Broad-Based Black Economic Empowerment (BBBEE).
Having said this, the dti is concerned that Sasol's proposed Employee Share Ownership Programme (ESOP) falls short of the level of empowerment envisioned in the codes. The BEE Act and its accompanying Codes of Good Practice were specifically intended for the benefit of black South African citizens. This therefore means that when reviewing a BEE transaction of this nature recognition will only be given to the extent that black South Africans benefit from the transaction. In the case of the Sasol transaction as the 4% allocation made for an ESOP is to be shared amongst permanent residents as well as white employees it is not clear what the effective allocation will be to black South African employees.
In view of the statement made by Sasol in their announcement that the final details of the deal will be announced in 2008, the dti trusts that this and any other flaw in the transaction will be ironed out, so that the deal, in its final formulation, fully embraces all the aspects of empowerment set out in the codes.