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Thread: The SASOL BEE deal

  1. #1
    Site Caretaker Dave A's Avatar
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    The SASOL BEE deal

    Here's a report on SASOL's BEE deal.
    Fuels and petrochemicals group Sasol will sell a 10% stake in the company to black investors in South Africa's biggest black economic empowerment (BEE) transaction to date, worth R25,9-billion.

    Sasol, the world's top maker of oil from coal, said the deal involving 63,1-million shares will broaden and transform the group's shareholder base.

    "We will make a difference by creating significant economic opportunity for more than one million potential beneficiaries ranging from individuals to rural women's groups who can invest in Sasol," Sasol CEO Pat Davies said in a statement.

    The transaction will have a positive impact on the group's net asset value per share, Sasol said.

    Sasol said the transaction will also see the group launching a public investment scheme for black South Africans in which it will issue 18,9-million ordinary shares and broaden employee ownership to almost 27 000 employees.

    The black public will acquire 3%, black investor groups 1,5%, Sasol employees 4% and the Sasol Inzalo foundation 1,5%.

    The transaction will be funded mostly through the issue of preference shares, although the investors and black groups taking part will contribute some cash, including about R400-million that is estimated will be contributed by the black public.

    The black investor groups selected to take part will have to contribute about 170-million, Sasol said.
    extracts from M&G here
    OK. I can see where R570 million is coming from. I can't help wondering about the other R25 billion, though.
    The trouble with opportunity is it normally comes dressed up as work.

  2. #2
    Site Caretaker Dave A's Avatar
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    Some details are a little clearer now. Participants will be required to pay up 5% of the value of shares they are buying. SASOL will arrange finance of the balance owed.
    The trouble with opportunity is it normally comes dressed up as work.

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    Moderator IanF's Avatar
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    Oil at a peak?

    Quote Originally Posted by Dave A View Post
    Some details are a little clearer now. Participants will be required to pay up 5% of the value of shares they are buying. SASOL will arrange finance of the balance owed.
    Is Sasol being clever do they see that oil is at a peak. Oil price is a big driver of profit and share price for Sasol. If oil is at a peak then this is a scheme doomed to failure, if not then this could be a good scheme. I just wonder why do this now at a all time high for oil?
    Only stress when you can change the outcome!

  4. #4
    Site Caretaker Dave A's Avatar
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    It's a rather pleasant thought that fuel costs might have peaked in Rand terms over the medium term.

    However, I reckon that's being a little optimistic.
    The trouble with opportunity is it normally comes dressed up as work.

  5. #5
    Moderator IanF's Avatar
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    Dave
    I try and follow the oil price graph on Moneyweb graphs and I hope it is a classic head and shoulders forming. Also if the US is slowing down (recession) which should slow down the the demand. But I am often wrong, so I don't put money on it.
    Only stress when you can change the outcome!

  6. #6
    Site Caretaker Dave A's Avatar
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    Oil in Dollars is one thing - Rand value is another.

    With CPIX running at 9.4% for Feb '08 and CPI at 9.8%, the current account deficit growing to 7.3% of GDP last year, and clear signs that all these balls are still gaining momentum...

    I hope I'm wrong, but I reckon SASOL is still in for a good run a while longer yet. Also, SASOL isn't just fuel - they've got a pile of byproducts too.
    The trouble with opportunity is it normally comes dressed up as work.

  7. #7
    Moderator IanF's Avatar
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    Commodity bubble?

    On another webgroup the question was asked what was the next bubble? We have had the dot com boom/bust then the the subprime crisis. It was said the commodity super cycle. Now thinking about this cycle as a bubble is interesting, because after the fall (big maybe) what will happen. I see Sasol announced the availability of prospectuses on the weekend, what will happen if the downturn hits after this closes.
    Then the interesting one was what will be the big thing after commodities, alternative energy anyone?
    Only stress when you can change the outcome!

  8. #8
    Site Caretaker Dave A's Avatar
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    I'll steer clear of the full range of commodities, but I suspect the price increase in resources is more a correction than a bubble so far. Worse still, this climb isn't born out of hype or sentiment. Demand has outstripped supply, and there is little evidence to suggest that will change any time soon.
    The trouble with opportunity is it normally comes dressed up as work.

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    Moderator IanF's Avatar
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    Sasol share price

    I see Sasol's share price is at R260.50 with a 6 month change of -48%. I wonder how this is going to hit this BEE deal.
    Anyone here invested in this? It would be interesting to know what is going to happen now.
    Only stress when you can change the outcome!

  10. #10
    Site Caretaker Dave A's Avatar
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    The market really turned on a dime, didn't it. You haven't done the owner experience until you've had a period of negative equity growth

    I suspect quite a few BEE deals are going to be looking like the underlying assets of the American housing market - undersecured. Worse still, the theory on many of them is they are paid up out of dividends, and we're seeing companies going ex-dividend of late. Would that constitute an instalment default?

    I'm sure there are lots of people looking forward to a market recovery sooner rather than later.
    The trouble with opportunity is it normally comes dressed up as work.

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