Sasol South Africa (SSA), a major subsidiary of Sasol, has concluded a sale and purchase agreement (SPA), to sell a 30% equity interest in the Republic of Mozambique Pipeline Company (ROMPCO), subject to pre-emptive rights by other shareholders.
ROMPCO is a joint venture between SSA (50%), Companhia Mocambiçana de Gasoduto S.A. S.A.R.L (CMG) (25%) and South African Gas Development Company (SOC) Limited (iGas) (25%). The joint venture owns the 865 kilometre gas transmission pipeline from Mozambique to South Africa.
SSA has agreed to sell the 30% interest in ROMPCO to an acquisition vehicle beneficially owned by a consortium comprising Reatile Group Proprietary Limited and the IDEAS Fund, managed by African Infrastructure Investment Managers Proprietary Limited.
The proposed transaction is subject to the waiver or exercise of pre-emptive rights held by iGas and CMG as the other shareholders in ROMPCO.
SSA will retain a 20% shareholding in ROMPCO and will continue to operate and maintain the pipeline in terms of the commercial agreement between the two entities, which is independent of the proposed transaction.
Sasol’s agreements with ROMPCO to transport gas to Secunda are unaffected and the tariffs remain as per the said agreements, which were approved by the National Energy Regulator of South Africa (NERSA).
“The Sale Shares will, subject to certain adjustments, be sold for a consideration comprising an initial amount of R4,145 billion and a deferred payment of up to R1 billion payable if certain agreed milestones are achieved by 30 June 2024,” said Paul Victor, Group Chief Financial Officer at Sasol.
Victor added that Sasol remains fully committed to its operations in Mozambique, which continue to be integral to the company’s gas strategy.
The proposed transaction will also be subject to the fulfilment of customary conditions precedent, including, among others, competition/anti-trust approvals in the relevant jurisdictions and all necessary consents of third parties including government authorities.
It is expected that the proposed transaction will become effective during the second half of calendar year 2021.