JOHANNESBURG, South Africa, Sept. 10 /PRNewswire-FirstCall/ --
SASOL LIMITED INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA (REG
NO.: 1979/003231/06) SHARE CODE JSE: SOL NYSE: SSL ISIN:
ZAE000006896 US8038663006 ("Sasol") ANNOUNCEMENT OF A 10% BLACK
ECONOMIC EMPOWERMENT TRANSACTION 1. INTRODUCTION Sasol intends to
undertake a major broad-based Black Economic Empowerment ("BEE")
transaction with skills development and capacity building as a
central theme. Subject to shareholder approval and the fulfilment
of the conditions listed in paragraph 6, it is proposed that Sasol
will conclude a BEE transaction in respect of 10% of its issued
share capital ("the BEE transaction") funded through a combination
of equity, third party funding and facilitation by Sasol. As the
BEE transaction will be implemented at the Sasol Limited level, the
BEE participants will benefit from Sasol's South African and
non-South African operations. As a major participant in the South
African economy, Sasol welcomes the role that it can play in
helping to meet the country's socio-economic objectives, as
outlined in the Accelerated and Shared Growth Initiative for South
Africa (AsgiSA). Sasol is committed to advancing these empowerment
initiatives in ways that are sustainable, credible and of benefit
to all its stakeholders and to the country as a whole. By focusing
on broad-based empowerment, skills development and capacity
building, this transaction will go to the heart of these
objectives. The proposed BEE transaction is designed to provide
long term, sustainable benefits to all participants and will have a
tenure of ten years. It is proposed to comprise the following four
participant groupings (collectively referred to as the "BEE
participants") with their respective beneficial ownership in Sasol:
-- broad-based black South African public (the "black public") -
3,0%; selected BEE groups (the "selected participants") - 1,5%; --
all Sasol employees, black and white, below managerial level that
are permanently resident in South Africa (comprising 60% black and
40% white employees), ("Sasol employees") and Sasol black managers
and black non-executive directors - 4,0%; and -- Sasol Foundation
(the "Sasol Foundation") - 1,5%. At the closing share price of R285
on 5 September 2007, the BEE transaction has a value of
approximately R17,9 billion, which will make it the largest single
broad-based BEE ownership transaction in South Africa to date. In
ensuring that the BEE transaction supports the full principles of
broad-based BEE, Sasol, in conjunction with the National
Empowerment Fund (the "NEF"), are working together on ways in which
the NEF can participate in facilitating the broad-based public
offer. 2. DETAILS OF THE PROPOSED BEE TRANSACTION 2.1 Rationale and
principles for the BEE transaction In line with Sasol's empowerment
objectives, this BEE transaction has been designed to provide long
term benefits to a broad group of black South Africans, with a
focus on lower income groups, particularly women. In order to
structure the BEE transaction efficiently, Sasol will be guided
primarily by the following principles: -- from inception, the
vesting of full voting and economic rights in respect of 10% of the
issued share capital of Sasol to the BEE participants, through
separate investment entities; -- focusing on broad-based BEE groups
with significant involvement of broad-based women's groups; --
enabling active involvement of selected participants in Sasol's
transformation, skills and capacity building programmes; --
creating a Sasol Foundation, which will focus on community
development and promoting skills and capacity development in South
Africa; -- achieving a sustainable BEE transaction at a realistic
economic cost (inclusive of any dilution) to Sasol's ordinary
shareholders; -- ensuring compliance with the letter and spirit of
the Broad-Based Black Economic Empowerment Codes of Good Practice
("Codes of Good Practice"); and -- broadening ownership in Sasol
amongst its employees. 2.2 BEE participants Black public This
participant grouping will allow all black South Africans an
attractive opportunity to participate in the economy through the
BEE transaction. Accordingly, all black South African citizens (as
envisaged in the Codes of Good Practice) and black-owned entities
will be eligible to participate through a public share offer. The
black public will benefit from 3,0% of the issued share capital of
Sasol. Selected participants This participant grouping will play an
important role in furthering Sasol's transformation, skills and
capacity building programmes. A request for expression of interest
from BEE groups will be published shortly. In selecting
participants, Sasol will give preference to, amongst others: -- BEE
groups that are currently involved in Sasol's business (including
unions, franchisees, customers and suppliers); -- broad-based BEE
groups focusing on the broader empowerment objectives and in
particular those focusing on capacity and skills development,
preferably in the fields of science and technology; -- broad-based
BEE groups focusing on community upliftment projects in the
vicinity of Sasol's main plants in South Africa, namely Secunda and
Sasolburg; and -- broad-based black women's groups that fit the
characteristics outlined above. Selected participants will benefit
in aggregate from 1,5% of the issued share capital of Sasol. Sasol
employees, Sasol black management and black non-executive directors
This participant grouping is intended to broaden ownership in Sasol
among its employees and to spread a significant portion of the
benefit of the BEE transaction amongst Sasol employees to ensure
the sustained success of Sasol. Black and white Sasol employees,
below managerial level, will participate through an employee share
ownership scheme (the "Broad-Based Employee Scheme"). These
employees will be allocated an equal number of shares. This scheme
will benefit from 3,7% of the issued share capital of Sasol of
which, (at current employment ratios), 2,2% relates to black
employees and 1,5% to white employees. Sasol black management and
black non-executive directors will participate in the BEE
transaction through two separate employee share ownership schemes,
namely the "Black Management Scheme" and the "Black Non-Executive
Director Scheme", respectively. The participation in these two
schemes will collectively comprise 0,3% of the issued share capital
of Sasol. The Broad-Based Employee Scheme, Black Management Scheme
and Black Non- Executive Director Scheme are collectively referred
to as "the Employee Scheme". In terms of the Employee Scheme,
participants will acquire a vested right to receive ordinary shares
(the "allocated shares") in Sasol, which rights will vest at the
inception of the Employee Scheme. These participants will not be
required to make any equity contributions and will become entitled,
from inception, to 50% of all dividends paid in respect of their
respective allocated shares. Sasol Foundation The primary focus of
the Sasol Foundation is capacity building of black South Africans,
predominantly in the fields of science and technology. This is a
crucial contribution by Sasol to the establishment of skilled
people to support Sasol's and South Africa's transformation
objectives. The Sasol Foundation will also focus on community
upliftment projects in the vicinity of Sasol's main plants at
Secunda and Sasolburg. This foundation's life will extend beyond
the term of the transaction to become a lasting contributor to
community upliftment. The Sasol Foundation will benefit from 1,5%
of the issued share capital of Sasol. 3. STRUCTURE AND FINANCING OF
THE BEE TRANSACTION 3.1 Guiding principles The structure and
financing of the BEE transaction will be guided by the following
principles: -- creating a sustainable BEE transaction that is
acceptable to all stakeholders; -- categorising BEE participants
according to common characteristics and objectives; -- maintaining
adequate governance structures within each BEE participant grouping
to ensure that, inter alia, all contractual and financial
obligations can be met. 3.2 Ownership structure and financing 3.2.1
Ownership structure In order to facilitate the financing of the BEE
transaction and to ensure sound governance of such funding
arrangements, a number of investment entities will be established.
These entities will hold the interests of BEE participant groupings
in the issued share capital of Sasol. The BEE participants will,
from inception, have full voting and economic rights associated
with the respective investment entities' interests in the issued
share capital of Sasol. The intended structure is as follows:
------------------- ------------- -----------------
----------------- Sasol employees, Sasol black managers and
Beneficiaries Selected Black public black non-executive
participants directors ------------------- -------------
----------------- ----------------- | | | | |100% |100% |100% |100%
| | | | ------------------- ------------- -----------------
----------------- Employee Scheme Sasol Selected Black Public
investment entity Foundation Participants investment entity
investment entity ------------------- -------------
----------------- ----------------- | | | | |4% |1,5% |1,5% |3% | |
| |
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Sasol Limited
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Note: Percentage ownership in Sasol is shown in this table and
throughout this announcement after implementation of the BEE
transaction and the intended share repurchases referred to in
paragraph 4 below. 3.2.2 Financing Due to the size of the proposed
BEE transaction and market constraints on the availability of third
party funding, the BEE transaction will be financed through an
optimal combination of equity, third party funding and Sasol
facilitation. The Selected Participants and Black Public investment
entities will be funded by way of equity contributions and third
party funding (external preference shares), with appropriate Sasol
facilitation. The Employee Scheme investment entity and the Sasol
Foundation will be funded entirely through Sasol facilitation.
Preferred ordinary shares In order to maximise the quantum of
external preference shares issued to third party funders, Sasol
will create a new class of unlisted shares, namely preferred
ordinary shares with a fixed cumulative dividend right. Sasol will
issue 28,2 million of these preferred ordinary shares, equal to
4,5% of Sasol's total issued share capital, to the Black Public
investment entity (3,0%) and the Selected Participant investment
entity (1,5%). It is intended that these shares will carry a fixed
cumulative preferred dividend right for a period of ten years. This
fixed preferred dividend right will rank ahead of the dividend
rights of existing ordinary shares. In all respects, other than the
fixed preferred dividend rights, the preferred ordinary shares will
rank equal to the existing Sasol ordinary shares. After ten years,
preferential treatment will cease and these shares will be
identical to Sasol ordinary shares and will then be listed on the
JSE Limited as ordinary shares. 3.2.2.1 Black public The black
public will participate through an unlisted entity, (the "Black
Public investment entity"). The Black Public investment entity will
subscribe for 18,8 million Sasol preferred ordinary shares
(equivalent to 3,0% of the Sasol issued share capital). The black
public will be required to hold their shares in the Black Public
investment entity for a minimum period of five years. It is
envisaged that a market will then be created to enable the black
public to trade their shares in the Black Public investment entity
with other black South Africans. At the end of the transaction, the
Black Public investment entity will distribute the remaining Sasol
ordinary shares, after all associated outstanding obligations have
been settled, to the black public. It is envisaged that the Sasol
preferred ordinary shares owned by the Black Public investment
entity will be financed through: -- equity contributions from
members of the black public; -- third party funding in the form of
preference shares with no recourse to Sasol; and -- third party
funding in the form of preference shares with Sasol facilitation,
subject to section 38 of the Companies Act, 1973, being amended.
3.2.2.2 Selected participants The selected participants will
participate through an unlisted entity (the "Selected Participants
investment entity"). The Selected Participants investment entity
will subscribe for 9,4 million Sasol preferred ordinary shares
(equal to 1,5% of Sasol's issued share capital). It is envisaged
that the Sasol preferred ordinary shares owned by the Selected
Participants investment entity will be funded and issued on a
similar basis to the Black Public investment entity described
above. The selected participants will be required to hold their
shares in the Selected Participants investment entity for the
duration of the transaction. At the end of that period, the
Selected Participants investment entity will distribute the
remaining Sasol ordinary shares, after all associated outstanding
obligations have been settled, to the selected participants.
3.2.2.3 Employee Scheme The Employee Scheme investment entity will
subscribe for 4% (25,1 million) of Sasol's ordinary shares at a
minimum value ("nominal value"). At the end of the transaction
period, Sasol will have an option to repurchase a number of the
shares determined in accordance with a formula at the same nominal
value ("repurchase option"). To ensure flow-through of benefits to
participants from inception, the Employee Scheme investment entity
will receive 50% of dividends declared with respect to the Sasol
ordinary shares held, which dividends will be distributed to Sasol
employees, Sasol black management and black non-executive
directors. At the end of the transaction, these participants will
also receive their respective allocated shares remaining after the
repurchase option has been exercised. -- The formula in respect of
the repurchase option takes into consideration: -- the market value
of the Sasol ordinary shares issued at inception of the BEE
transaction is escalated by a growth factor of approximately 11,5%
per annum; -- the value of 50% of the dividends, which do not
accrue to the Employee Scheme investment entity; and -- the Sasol
ordinary share price at the end of the transaction. 3.2.2.4 Sasol
Foundation The Sasol Foundation will subscribe for 1,5% (9,4
million) of Sasol's issued ordinary shares at a nominal value. It
is envisaged that the Sasol Foundation will be a public benefit
organisation. The Sasol Foundation will be financed through a
similar structure as the Employee Scheme investment entity
described above. 4. Share repurchase programme to mitigate dilution
Pursuant to the general authority from its shareholders, Sasol,
through a wholly owned subsidiary, has repurchased 14,9 million
Sasol ordinary shares (2,4% as at 30 June 2007). Sasol may
recommence its repurchase programme after the release of its annual
results. Share repurchases will be funded from available cash. The
BEE transaction will require the issue of 34,5 million Sasol
ordinary shares and 28,2 million Sasol preferred ordinary shares to
the BEE participants. To mitigate dilution to existing ordinary
shareholders, Sasol intends to repurchase an equivalent number,
62,7 million, of Sasol ordinary shares. To the extent that prior to
the announcement of the remaining terms of the BEE transaction, the
number of ordinary shares held by the Sasol wholly owned
subsidiary, which has undertaken the repurchase programme, is less
than 62,7 million Sasol ordinary shares, Sasol will consider a
share repurchase by way of a scheme of arrangement in terms of
Section 311 of the Companies Act, 1973,("the scheme"). If the
scheme is approved by the shareholders, they will sell to Sasol a
pro rata portion of their shares at the prevailing market price.
The scheme shares will be acquired by a Sasol wholly owned
subsidiary from available cash. 5. Illustrative financial effects
The unaudited pro forma financial information of Sasol was prepared
in order to provide the illustrative financial effects of the BEE
transaction and intended share repurchase programme on Sasol,
assuming that the BEE transaction and share repurchases had been
fully implemented on 1 July 2006. The unaudited pro forma financial
effects are based on the assumptions set out below and include
assumptions on share price and funding costs, which can only be
determined in the future. The unaudited pro forma financial
information is the responsibility of the directors of Sasol and was
prepared for illustrative purposes only and may not, because of its
nature, fairly present Sasol's financial position, changes in
equity and results of its operations or cash flows. It does not
purport to be indicative of what the financial results would have
been, had the BEE transaction and share repurchases occurred on a
different date. Unaudited pro forma financial information per share
before and after the implementation of the BEE transaction and
intended share repurchases is set out in the table below: Before
After Percentage change (%) Attributable earnings per share(3)
cents 2 735 2 406 (12,0) Attributable earnings per share (excluding
the share- based payment expense)(4) cents 2 735 2 765 1,1 Diluted
earnings per share cents 2 702 2 374 (12,1) Headline earnings per
share(5) cents 2 537 2 191 (13,6) Net asset value per share(6)
cents 10 055 8 582 (14,6) Net tangible asset value per share(6)
cents 9 857 8 367 (15,1) Weighted average number of shares in
issue(7) million 622,6 574,8 (7,7) Weighted average diluted number
of shares in issue(7) million 630,3 582,5 (7,6) Number of shares in
issue (excluding share repurchase)(7) million 612,8 565,0 (7,8)
Notes and assumptions: 1. The unaudited pro forma financial
information is based on the audited financial position of the Sasol
Group as of 30 June 2007 and the results of its operations for the
year ended 30 June 2007. 2. The unaudited pro forma financial
information per share after the BEE transaction and intended share
repurchase programme are based on the following assumptions: (a)
the BEE transaction and share repurchase programme were implemented
with effect from 1 July 2006 for calculation of the income
statement effects and on 30 June 2007 for calculation of the
balance sheet effects; (b) 34,5 million Sasol ordinary shares were
issued, at nominal value, to the Employee Scheme and the Sasol
Foundation. 28,2 million Sasol preferred ordinary shares were
issued, at the closing share price of R285 on 5 September 2007, to
the Selected Participants and Black Public investment entities; (c)
the Employee Scheme, Sasol Foundation, Selected Participants and
Black Public investment entities are consolidated for accounting
purposes. In this regard any shares issued to these entities are
regarded as treasury stock; (d) the 47,8 million Sasol ordinary
shares repurchased at the closing share price of R285 on 5
September 2007, in terms of the intended share repurchase programme
are treated as treasury stock; (e) the fixed preferred ordinary
dividend, which is payable in respect of the 28,2 million Sasol
preferred ordinary shares amounts to approximately R17,35 per
share; and (f) the finance cost applicable to the implementation of
the BEE transaction and the intended share repurchase programme,
for the twelve months ended 30 June 2007, is based on the relevant
prevailing market rates. 3. Attributable earnings per share are
computed by dividing attributable earnings by the weighted average
number of shares in issue after taking into account the effect of
the intended share repurchase programme. 4. In accordance with
International Financial Reporting Standard 2 - Share-based Payment
(IFRS 2), attributable earnings for the year ended 30 June 2007 has
been adjusted by R2,1 billion, assuming shares were issued to the
BEE participants at the closing share price of R285 on 5 September
2007. The share-based payment expense is calculated based on
prevailing market conditions and changes in these conditions can
give rise to material movements in this expense. The share-based
payment expense includes R0,1 billion relating to the Employee
Scheme. The total share-based payment expense associated with the
Employee Scheme amounts to R1,1 billion, which will be expensed in
the income statement over the period of ten years. The total share-
based payment expense for the BEE transaction, therefore amounts to
R3,1 billion. 5. Headline earnings are calculated in accordance
with the requirements of Circular 8/2007 - Headline Earnings. 6.
Net asset value per share and net tangible asset value per share
have been calculated after taking into account the shares
repurchased. Due to the consolidation of the Selected Participants
and Black Public investment entities, the effect of third party
funding (external preference shares) raised by these entities has
been taken into account in the calculation of the net asset value
and net tangible asset value per share after the BEE transaction.
7. Share repurchases are excluded from the weighted average number
of shares and the number of shares in issue after implementation of
the BEE transaction and repurchase programme. The weighted average
number of shares also excludes the shares issued to the Employee
Scheme, Sasol Foundation, Selected Participants and Black Public
investment entities, which shares are treated as treasury stock. 8.
Sasol complies with the requirements of AC 503 - Accounting for
Black Economic Empowerment Transactions and Circular 8/2006 -
Disclosure of Accounting for Black Economic Empowerment
Transactions. 6. CONDITIONS PRECEDENT The implementation of the
proposed BEE transaction will be subject, inter alia, to the
following: -- obtaining Sasol shareholder approval for the BEE
transaction, including the scheme; -- finalising the selection of
the BEE groups; -- concluding the financing agreements with third
party funders; -- concluding agreements with all other relevant
parties; -- obtaining the requisite regulatory approvals; and --
compliance with all applicable laws and regulations. The external
funding in the form of preference share capital with Sasol
facilitation is based on the assumption that the amendment of
section 38 of the Companies Act, 1973 will become law before the
further announcement referred to in paragraph 7 below is made.
Should section 38 not be amended prior to such an announcement
being made, an alternative funding arrangement will be announced at
that time. 7. FURTHER ANNOUNCEMENT EXPECTED IN FIRST HALF OF 2008 A
further announcement will be made during the first half of 2008
after the relevant agreements have been signed and third party
financing arrangements have been finalised. Such announcement will
provide the detailed terms of the BEE transaction, including the
scheme, financial effects and expected economic costs of the BEE
transaction, which cost is anticipated to be comparable to other
BEE transactions concluded to date. Rosebank 10 September 2007
Sponsor Deutsche Securities Merchant bank and transaction sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited) Legal
adviser Edward Nathan Sonnenbergs Inc Disclaimer - Forward-looking
statements We may in this document make statements that are not
historical facts and relate to analyses and other information based
on forecasts of future results and estimates of amounts not yet
determinable. There are forward-looking statements as defined in
the U.S. Private Securities Litigation Reform Act of 1995. Words
such as "believe", "anticipate", "expect", "intend", "seek",
"will", "plan", "could", "may", "endeavour" and "project" and
similar expressions are intended to identify such forward-looking
statements, but are not exclusive means of identifying such
statements. By their very nature, forward-looking statements
involve inherent risks and uncertainties, both general and
specific, and there are risks that predictions, forecasts,
projections and other forward-looking statements will not be
achieved. If one or more of these risks materialize, or should
underlying assumptions prove incorrect, actual results may be very
different from those anticipated. The factors that could cause our
actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such
forward-looking statements are discussed more fully in our annual
report under the Securities Exchange Act of 1934 on Form 20-F filed
on November 2, 2006 and in other filings with the United States
Securities and Exchange Commission. Forward-looking statements
apply only as of the date on which they are made and Sasol does not
undertake any obligation to update or revise any of them, whether
as a result of new information, future events or otherwise. The
Sasol shares that will be allocated in terms of the BEE transaction
have not been and will not be registered with the United States
Securities and Exchange Commission under the US Securities Act of
1933, as amended, or any securities laws of any state of the United
States and may not be offered or sold in the United States absent
an exemption from registration requirements. The Sasol Investor
Relations team Tel.: +27 11 441 3113/3563/3321 DATASOURCE: Sasol
Limited CONTACT: The Sasol Investor Relations team, Tel.: +27 11
441 3113/3563/3321, Web site: http://www.sasol.com/
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