JOHANNESBURG, South Africa, March 25 /PRNewswire-FirstCall/ --
Highlights -- 10% equity ownership of Sasol through the Sasol
Inzalo BEE Transaction -- Broadening and transforming Sasol's
shareholder base as a listed entity -- 63,1 million shares valued
at R 25,9 billion - the single largest broad-based BEE transaction
to date -- Sasol's facilitation of Sasol Inzalo BEE transaction in
line with market norms -- Positive impact on net asset value per
share -- Marginal impact on unaudited pro forma annualised
earnings, excluding the non-cash share-based payment charge --
Participants will be employees, the Sasol Inzalo Foundation, black
groups and the black public -- Sasol Inzalo Foundation to
facilitate skills development and capacity building in the critical
areas of mathematics, science and technology -- Meaningful
long-term benefits to be spread widely among black South Africans,
primarily in the lower income groups and particularly women --
Participants will benefit from Sasol's domestic and international
growth -- Compliance with the Broad-based BEE Codes of Good
Practice, with effective black ownership of 19,7% of Sasol's South
African business 1. Introduction In an announcement dated 10
September 2007, published on SENS and in the press, shareholders
were advised of Sasol's intention to conclude a 10% equity
ownership transaction (the "Transaction"), subject to shareholders'
approval. The Transaction is called Sasol Inzalo. "Inzalo" is an
expressive word that signifies birth, creation of life and new
beginnings. At the closing price of R 410 per share on 18 March
2008, the Sasol Inzalo BEE Transaction has a value of R 25,9
billion. If approved by shareholders, Sasol will conclude the
Transaction in respect of 10% of its issued share capital, as at 18
March 2008. Unless indicated otherwise, the BEE ownership
percentages referred to in this announcement are before giving
effect to the Transaction. Black ownership will be approximately
8,3% which represents an effective 19,7% of Sasol's South African
business in terms of the Broad-Based Black Economic Empowerment
Codes of Good Practice ("Codes"). Sasol's current share repurchase
programme, initiated on 7 March 2007, has resulted in the
repurchase of 5,9% of Sasol ordinary shares by Sasol Investment
Company (Proprietary) Limited, a wholly-owned subsidiary of Sasol.
After the implementation of the Transaction, and assuming no
further shares are repurchased by Sasol, the total will transaction
represent 9,6% of Sasol's issued share capital. Sasol intends to
continue its current share repurchase programme, subject to the
financial position (including cash flow and gearing considerations)
of the Company and the prevailing market and economic conditions.
Should Sasol continue the current share repurchase programme (up to
the authorised limit of 10%) it would result in an increase in the
effective ownership by the participants in the Transaction ("BEE
Participants") from 9,6% to 10%. In the announcement dated 10
September 2007, Sasol indicated that to mitigate dilution to
existing ordinary shareholders: -- it intended to repurchase, in
terms of its current share repurchase programme, the same number of
shares as would be issued in terms of the Transaction, namely 63,1
million Sasol ordinary shares; and -- to the extent that Sasol had
not repurchased 63,1 million Sasol ordinary shares, it would
consider a share repurchase by way of a scheme of arrangement in
terms of Section 311 of the Companies Act, 1973 ("the scheme"). In
view of the number of shares repurchased to date and Sasol's
intention to resume its current share repurchase programme, under
the aforementioned conditions, Sasol has decided not to proceed
with the scheme. 2. Rationale for and principles of the Transaction
In line with Sasol's empowerment objectives, the Transaction has
been designed to provide long-term benefits to a broad group of
Black People (as defined in the Codes) with a focus on Sasol's own
employees and lower income groups, particularly women. 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
and growth objectives. In addition to this, the establishment of
the Sasol Inzalo Foundation (the "Sasol Inzalo Foundation" or the
"Foundation") will facilitate skills development and capacity
building in the critical areas of mathematics, science and
technology. 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, the Transaction will go to the heart of these objectives.
During the design phase of the Transaction, Sasol was guided
primarily by the following principles: -- the vesting of full
voting and economic rights, subject to the requirements of Sasol
and the external funders ("Financing Institutions"), in the BEE
Participants from inception, directly or through separate
investment entities, in respect of 10% of the issued share capital
of Sasol; -- focusing on broad-based groups with at least 51% black
ownership and/or at least 51% black beneficiaries ("Black Groups")
with significant involvement of broad-based women's groups; --
enabling the active involvement of Black Groups in Sasol's
transformation, skills and capacity building programme; -- creating
the Sasol Inzalo Foundation, which will focus on skills development
and capacity building in South Africa including the communities in
Sasolburg and Secunda; -- achieving a sustainable transaction at an
acceptable economic cost (within market norms and inclusive of any
dilution) to shareholders; -- ensuring compliance with the letter
and spirit of the Codes; and -- broadening ownership in Sasol among
its employees. 3. Transaction overview 3.1 Transaction structure
The Transaction will be structured as follows: Please click on the
following link:
http://www.newscom.com/cgi-bin/prnh/20080324/NYTU021 * The total
number of Sasol Preferred Ordinary Shares and Sasol BEE Ordinary
Shares issued to the Black Public under the Sasol Inzalo Black
Public Invitations will together not exceed 3,0% of Sasol's issued
share capital The BEE Participants will acquire indirect and/or
direct beneficial ownership in Sasol's issued share capital as
follows: -- all Sasol employees, black and white, below managerial
level that are permanently resident in South Africa or who are
migrant workers ("Sasol Employees") and Sasol black managers and
black executive directors ("Black Managers") through the Sasol
Inzalo Employee Trust and the Sasol Inzalo Management Trust
respectively (collectively the "Employee Trusts") - 4,0%; -- the
Sasol Inzalo Foundation, which will be established as a trust -
1,5%; -- selected Black Groups involved in Sasol's business as
either trade unions, suppliers, customers or franchisees ("Involved
Groups") and broad-based Black Groups involved in skills
development and capacity building particularly in mathematics,
science and technology or community upliftment projects in
Sasolburg or Secunda ("Broad-based Groups") (collectively "Selected
Participants") through Sasol Inzalo Groups Limited ("Groups
InvestCo") and Sasol Inzalo Groups Funding (Proprietary) Limited
("Groups FundCo") - 1,5%; and -- members of the black South African
public ("Black Public") - 3,0%: -- through Sasol Inzalo Public
Limited ("Public InvestCo") and Sasol Inzalo Public Funding
(Proprietary) Limited ("Public FundCo") by way of a funded black
public invitation (the "Funded Invitation"); and -- directly into
Sasol by way of a share purchase scheme where participants will
subscribe for a separate class of Sasol BEE Ordinary Shares for
cash (the "Cash Invitation"), (collectively, the "Sasol Inzalo
Black Public Invitations"). The Employee Trusts, Foundation, Groups
FundCo, Public FundCo and the Black Public participating through
the Cash Invitation together comprise the "BEE Shareholders". The
Employee Trusts and the Foundation will be funded entirely through
Sasol facilitation. Groups FundCo and Public FundCo (collectively,
the "Funding Companies") will be funded by way of equity
contributions and preference share funding (including preference
shares subscribed for by Sasol), with appropriate Sasol
facilitation. The Cash Invitation will rely on cash subscriptions
from participants only. The Transaction will endure for a period of
ten years. 3.2 Issue price for the Sasol Preferred Ordinary Shares
and the Sasol BEE Ordinary Shares Two new classes of shares, Sasol
Preferred Ordinary Shares and Sasol BEE Ordinary Shares, the terms
of which are outlined in paragraphs 4 and 5 below, will be created.
These shares will be issued at R 366 per share (the "Issue Price"),
being the 60 day volume weighted average price ("VWAP") of Sasol
ordinary shares to 18 March 2008, being the last day prior to the
board of directors of Sasol ("the Board") reaching a decision on
the Issue Price. The Issue Price represents a discount of
approximately 11% to the Sasol closing price on 18 March 2008. The
Board, taking cognisance of the preliminary fairness opinion
provided by Deloitte & Touche Corporate Finance ("Deloitte") as
contained in paragraph 14 below, is of the view that a 60-day VWAP
is appropriate given the recent volatility of the Sasol share price
and the need for Sasol to ensure a sustainable Transaction over the
long term 3.3 Specific issue of shares In order to give effect to
the Transaction, Sasol will issue to the BEE Shareholders: -- 34,7
million Sasol ordinary shares (5,5% of Sasol's issued share
capital) at a nominal value of R0,01 per share, subject to Sasol's
Repurchase Right at the end of the Transaction term (detailed in
paragraphs 6 and 7 below); -- 25,6 million Sasol Preferred Ordinary
Shares (4,1% of Sasol's issued share capital) at the Issue Price.
Should the subscriptions for the Sasol BEE Ordinary Shares under
the Cash Invitation be less than 2,8 million shares, the number of
Sasol Preferred Ordinary Shares made available for the Funded
Invitation could be increased by such shortfall, up to a maximum of
2,8 million Sasol Preferred Ordinary Shares, so that the Sasol
Preferred Ordinary Shares that are available for the Funded
Invitation could reach a maximum of 18,9 million. Accordingly the
number of issued Sasol Preferred Ordinary Shares could therefore
reach a maximum in total of 28,4 million; and -- 2,8 million Sasol
BEE Ordinary Shares (0,4% of Sasol's share capital) at the Issue
Price. Should subscriptions for the Sasol Preferred Ordinary Shares
under the Funded Invitation be less than 16,1 million shares, the
shortfall, up to a maximum of 16,1 million Sasol BEE Ordinary
Shares, will be made available for the Cash Invitation and the
number of issued Sasol BEE Ordinary Shares could therefore reach a
maximum of 18,9 million, provided that the total number of Sasol
Preferred Ordinary Shares and Sasol BEE Ordinary Shares issued to
the Black Public under the Sasol Inzalo Black Public Invitations
does not exceed 18,9 million shares. The shares will be issued as
follows: Shares % interest Current market (million) in Sasol value*
(R million) Sasol ordinary shares Employee Trusts 25,2 4,0 10 345
Sasol Inzalo Foundation 9,5 1,5 3 879 34,7 5,5 14 224 Sasol
Preferred Ordinary Shares Groups FundCo 9,5 1,5 3 879 Public FundCo
16,1 2,6 6 595 25,6 4,1 10 474 Sasol BEE Ordinary Shares Black
Public directly 2,8 0,4 1 164 Total 63,1 10,0 25 862 * the current
market value of the shares is based on the closing share price on
18 March 2008 of R 410. 4. Sasol Preferred Ordinary Shares Sasol
will create Sasol Preferred Ordinary Shares by converting 28,4
million authorised, unissued, no par value Sasol ordinary shares
into Sasol Preferred Ordinary Shares. Sasol will issue up to 28,4
million Sasol Preferred Ordinary Shares as follows: -- 9,5 million
Sasol Preferred Ordinary Shares or 1,5% of Sasol's issued share
capital to Groups FundCo; and -- up to 18,9 million Sasol Preferred
Ordinary Shares or 3,0% of Sasol's issued share capital to Public
FundCo. The Sasol Preferred Ordinary Shares will not be listed on
the JSE Limited ("JSE"). The Sasol Preferred Ordinary Shares will
carry a cumulative preferred dividend right during the term of the
Transaction, as follows: -- R16,00 per annum for each of the three
years ending 30 June 2011; -- R22,00 per annum for the next three
years until 30 June 2014; and -- R28,00 per annum for the last four
years until 30 June 2018. The preferred ordinary dividend will be
adjusted appropriately such that the Funding Companies will not be
adversely affected, from a tax perspective, when the proposed
change from a secondary tax on companies to a shareholder dividend
withholding tax becomes effective. Such adjustment will only be
made to the extent that Sasol is not in a worse economic position
after the adjustment. The preferred dividend right of the Sasol
Preferred Ordinary Shares will rank ahead of the dividend rights of
the Sasol ordinary shares and Sasol BEE Ordinary Shares. Except for
the preferred dividend right, the Sasol Preferred Ordinary Shares
will rank pari passu with the Sasol ordinary shares. At the end of
the term of the Transaction, the preferred dividend right will
cease and the Sasol Preferred Ordinary Shares will automatically be
Sasol ordinary shares, which will then be listed on the JSE as
Sasol ordinary shares. 5. Sasol BEE Ordinary Shares Sasol will
create the Sasol BEE Ordinary Shares, by converting 18,9 million
authorised, unissued, no par value Sasol ordinary shares into Sasol
BEE Ordinary Shares. Sasol will issue up to 18,9 million Sasol BEE
Ordinary Shares to those members of the Black Public who choose to
participate in the Transaction through the Cash Invitation and who
subscribe for these shares. The Sasol BEE Ordinary Shares, which
are more fully described in paragraph 9.5 below, will rank pari
passu with the Sasol ordinary shares and will differ only in the
fact that they will not be listed. The Sasol BEE Ordinary Shares
cannot be traded for the first two years of the Transaction and,
for the remainder of the Transaction term, can only be traded
between Black People and Black Groups. At the end of the
Transaction term, the Sasol BEE Ordinary Shares will automatically
be Sasol ordinary shares and will then be listed on the JSE. 6.
Employee participation 6.1 Introduction The employee share
ownership schemes that will be established for the benefit of Sasol
Employees (the "Employee Scheme") and Black Managers (the
"Management Scheme") (collectively, "Sasol Inzalo Schemes") will
benefit from the 4,0% of Sasol's issued share capital issued to the
Employee Trusts. The Sasol Inzalo Schemes are intended to broaden
ownership in Sasol among Sasol's employees and to spread a
significant portion of the benefit of the Transaction amongst Sasol
employees to contribute to the sustained success of Sasol. The
participation in the Transaction of each Employee Trust is set out
below. Employee Trust Shares Current market (million) % of Sasol
value* (R million) Sasol Inzalo Employee Trust 23,3 3,7% 9 569
Sasol Inzalo Management Trust 1,9 0,3% 776 Total 25,2 4,0% 10 345 *
The current market value of the shares is based on the closing
share price on 18 March 2008 of R410. Vested rights will be
allocated to black Sasol Employees and Black Managers in respect of
approximately 2,3% of Sasol's issued share capital. Vested rights
will be allocated to white employees and migrant workers who will
participate in the Employee Scheme in respect of approximately 1,7%
of Sasol's issued share capital. 58% of the participants in the
Sasol Inzalo Schemes will be Black People and 42% will be white
employees and migrant workers. White employees and migrant workers
will not be included in the calculation of BEE points in terms of
the Codes. 6.2 Terms of participation by Sasol Employees and Black
Managers Participants in the Sasol Inzalo Schemes will each be
granted vested rights to Sasol ordinary shares. This is subject to
Sasol being entitled to repurchase a number of shares, determined
in terms of a formula, at the end of the Transaction term (the
"Repurchase Right"). Each right granted to a participant in the
Sasol Inzalo Schemes will correspond to one Sasol ordinary share.
These rights will vest at the inception of each of the schemes. The
Sasol Employees and Black Managers will not be required to
contribute equity and will become entitled, from inception, to the
distribution of all the ordinary dividends received by the Employee
Trusts (as described in paragraph 6.3 below), in proportion to
their respective rights. Each participant in the Employee Scheme
will be allocated vested rights to 850 Sasol ordinary shares,
equivalent to approximately R350 000 at the closing price on 18
March 2008 of R 410 per share. The allocation of vested rights to
Sasol ordinary shares in the Management Scheme will be on the basis
of seniority and range from 5 000 to 25 000. 10% of the shares in
the Employee Trusts will be set aside for new employees appointed
during the first five years of the Transaction. Black Sasol
executive directors will participate in the Black Management Scheme
and will accordingly be related parties for purposes of the JSE
Listings Requirements. Sasol Employees or Black Managers who leave
the employ of Sasol during the term of the Transaction by reason of
dismissal will forfeit all their rights to Sasol ordinary shares. A
Sasol Employee or Black Manager who leaves the employ of Sasol by
reason of resignation: -- within the first three years after having
been allocated vested rights will forfeit all such rights; and --
three years or more after having been allocated vested rights will
forfeit 10% of such rights for each full year or part thereof
remaining from the date of resignation until the end of the term of
the Transaction. Sasol Employees or Black Managers who leave the
employ of Sasol by reason of retirement, early retirement, ill
health or dismissal due to operational requirements at any time
during the term of the Transaction will retain their entire
allocation of rights until the end of the term of the Transaction.
The heirs of those Sasol Employees and Black Managers who die will
likewise succeed to their entire allocation. Forfeited vested
rights to Sasol ordinary shares will be available for re-
allocation to new and existing Sasol employees. 6.3 Subscription by
the Employee Trusts for Sasol ordinary shares The subscription by
the Employee Trusts for Sasol ordinary shares will be facilitated
by Sasol as follows. -- The Employee Trusts, which will be funded
by contributions from Sasol, will collectively subscribe for 25,2
million Sasol ordinary shares at a nominal value of R0,01 per
share, for a total subscription price of R252 000. -- Each
subscription at nominal value will be subject to the following
pre-conditions: -- the right to receive only 50% of the ordinary
dividends and none of the extra-ordinary dividends paid in respect
of the Sasol ordinary shares issued to the Employee Trusts for the
duration of the Transaction; and -- Sasol's Repurchase Right in
terms of which Sasol is entitled to repurchase a number of Sasol
ordinary shares from the Employee Trusts at a nominal value of
R0,01 per share. The number of shares will be calculated in
accordance with a predetermined formula which considers the
following: -- the aggregate value of the Sasol ordinary shares
issued to the Employee Trusts based on R366 per share (i.e. the 60
day VWAP of Sasol ordinary shares to 18 March 2008), escalated at
11,5% per annum for the Transaction term; -- the dividends not paid
to the Employee Trusts resulting from the pre-conditions attaching
to their subscription for Sasol ordinary shares; and -- the market
price of the Sasol ordinary shares at the end of the Transaction
term. -- After Sasol has exercised its Repurchase Right and subject
to the forfeiture of vested rights outlined in paragraph 6.2 above,
each Sasol Employee and Black Manager will receive a number of
Sasol ordinary shares having regard to the participant's vested
rights to those shares. -- Any shares and other assets remaining in
the Employee Trusts after the reallocation and distribution to new
and existing Sasol employees will be distributed to the Foundation
as residual vested beneficiary. 6.4 Governance of the Sasol Inzalo
Schemes Two of the trustees of the Sasol Inzalo Employee Trust will
be appointed by the Sasol Employees and one trustee will be
appointed by Sasol. The Black Managers and Sasol will each appoint
one trustee for the Sasol Inzalo Management Trust. The trustees
appointed by the Sasol Employees and Black Managers will be
independent of Sasol. The trustees will exercise the voting rights
attached to the Sasol ordinary shares owned by the Employee Trusts
in accordance with the individual instructions of the Sasol
Employees and Black Managers. Where participants have not given
voting instructions, the trustees will exercise the voting rights
at their discretion. 7. Sasol Inzalo Foundation 7.1 Introduction
The Foundation will own 1,5% of Sasol's issued share capital. The
vision of the Foundation is to significantly contribute to
sustainable socio-economic growth in South Africa by focusing on
skills development, primarily in mathematics, science and
technology. The Foundation will be formed for that purpose. The
Foundation will endure indefinitely. 7.1.1 Objectives and
activities of the Foundation The principal purpose of the
Foundation will be to carry on educational public benefit
activities with an emphasis on mathematics, science and technology.
In doing so, it shall act as a Broad-based Ownership Scheme as
contemplated in the Codes. The trustees of the Foundation will give
preference to the following activities in achieving the objectives
of the Foundation: -- alleviating the lack of skilled mathematics,
science and technology tuition in schools so as to boost the number
of pupils graduating with mathematics, science and technology
subjects and skills from secondary schools, inter alia, through the
establishment of the Sasol Maths and Science Academy as a secondary
school aiming to achieve a high level of excellence in these areas
based on internationally recognised curricula; -- boosting the
vocational skills pool in South Africa, inter alia, through working
jointly with or making donations to Further Education and Training
Colleges ("FET Colleges"), following on from the South African
Government's 'Adopt-an-FET' initiative, in an endeavour to address
skills shortages in respect of South African artisans generally.
This will be done, inter alia, by means of a nationwide drive to
use retired artisans and engineers: -- as coaches to allow learners
to complete the practical component of their training and
consequently become qualified as artisans and so become employable;
and -- to transfer their training skills to the FET Colleges; --
expanding the current Sasol Centres of Excellence initiative to
include needy tertiary institutions and promoting success rates of
secondary school pupils in achieving entry into degree courses with
a mathematics, science and/or technology base and graduating in
those degrees and undertaking post-graduate study, including: --
the provision of bridging courses to enable entry or continued
participation in a tertiary education institution; and -- assisting
with curriculum development for tertiary institutions, with a
strong mathematics, science and technology focus. 7.2 Subscription
by the Foundation for Sasol ordinary shares The subscription by the
Foundation for Sasol ordinary shares will be facilitated by Sasol
as follows: -- The Foundation, which will be funded by a
contribution from Sasol, will subscribe for 9,5 million Sasol
ordinary shares at a nominal value of R0,01 per share. The total
subscription price will be R95 000. -- Each subscription at nominal
value will be subject to the following pre-conditions: -- the
rights to receive only 5% of ordinary dividends and none of the
extra-ordinary dividends paid in respect of the Sasol ordinary
shares issued to the Foundation, for the Transaction term; and --
Sasol being entitled to repurchase a number of Sasol ordinary
shares, determined in accordance with a formula, from the
Foundation at the end of the term of the Transaction (the
"Repurchase Right"). -- At the end of the Transaction term, Sasol
may repurchase from the Foundation a number of Sasol ordinary
shares at a nominal value of R0,01 per share. The number of shares
will be calculated in accordance with a predetermined formula as
described in paragraph 6.3 above. After Sasol has exercised its
Repurchase Right, the Foundation will receive 100% of dividends
declared by Sasol on the Sasol ordinary shares owned by the
Foundation and will utilise such dividends to fund its activities.
7.3 Funding of activities of the Foundation During the Transaction
term, the operating and capital expenditure of the Foundation will
be funded from: -- the dividends received from the Sasol ordinary
shares issued to the -- Foundation; -- donations from the Sasol
Group; and -- funds raised from other donors. It is envisaged that
the Foundation will be self sufficient as regards its operating
expenses from inception. 7.4 Governance of the Foundation The
Foundation will be administered by a board of not less than three
trustees which will be appointed by Sasol. The majority of the
trustees will be Black People and 25% will be black women. At least
50% of the trustees will be independent of Sasol and not employed
by the Foundation. The trustees will not be beneficiaries of the
Foundation. The trustees will appoint a director to manage the day
to day operations and affairs of the Foundation. 8. Participation
by Selected Participants 8.1 Introduction Selected Participants
will indirectly own 1,5% of Sasol's issued share capital through
Groups InvestCo and Groups FundCo. Pursuant to the request for the
submission of expressions of interest by Black Groups that was
published by Sasol on 16 and 17 September 2007 and again on 9
October 2007, Sasol received a large number of expressions of
interest. After performing a comprehensive evaluation of the groups
that submitted expressions of interest, Sasol has selected a number
of groups to participate as Selected Participants and is currently
finalising the terms of their participation in the Transaction. 35
Broad-based Groups and 51 Involved Groups have accepted an
invitation to participate and will indirectly participate, through
Groups InvestCo, in 85% of the Sasol Preferred Ordinary Shares to
be issued to Groups FundCo. The Involved Groups include Abrina 5604
Limited ("Abrina") (described further below) and the investment
companies of certain of Sasol's recognised trade unions. Sasol is
continuing the process of selecting, in its discretion, appropriate
Black Groups to acquire the balance of 15% of the Sasol Preferred
Ordinary Shares. The Black Groups to be selected will have similar
characteristics to the Broad-based Groups and the Involved Groups
that have already been invited to participate in the Transaction.
In the interim, the Groups Facilitation Trust, a vehicle created
for this purpose, will subscribe for the balance of 15% of the
Sasol Preferred Ordinary Shares. The Groups Facilitation Trust will
be funded by Sasol. The name and description of the Selected
Participants, together with, inter alia, their respective
shareholdings in Groups InvestCo will be set out in the circular to
shareholders referred to in paragraph 17 below ("Circular"). It is
intended that the Broad-based Groups will play an important role in
assisting Sasol to increase South Africa's skills pool. Sasol
retail convenience centres franchisees have established Abrina
which, subject to finalising its internal funding arrangements, has
been invited to participate in an indirect subscription of Sasol
Preferred Ordinary Shares to a value of R820 million. The
shareholding in Abrina, which is in the process of being finalised,
is expected to be as follows: -- the employees of the individual
franchisees (up to 3 900 employees) will benefit from 37,5% of the
issued share capital of Abrina through a trust; and -- up to 234
shareholders representing approximately 100 franchise owners will
hold 62,5% of the issued share capital of Abrina. It is anticipated
that 85% of the interest that will be taken up by Abrina in Groups
InvestCo will be for the benefit of Black People. 8.2 Terms for
participation by Selected Participants An agreement ("Governing
Agreement") and deeds of adherence will be concluded between Sasol,
Selected Participants, Groups InvestCo and Groups FundCo in terms
of which each Selected Participant will undertake, inter alia, for
the duration of the Transaction term: -- to comply with the
provisions of the Governing Agreement, failing which that Selected
Participant will be obliged to offer its shares in Groups InvestCo
to the Groups Facilitation Trust; -- not to dispose of or encumber
its ordinary shares in Groups InvestCo, other than to the Groups
Facilitation Trust if a forced sale occurs; -- to retain its BEE
status and corporate structure (where applicable); -- for
Broad-based Groups, continue to be involved in skills development
and/or community upliftment projects in Sasolburg and Secunda; and
-- be managed in accordance with generally accepted corporate
governance principles. The Selected Participants will be entitled
to receive a dividend of up to 5% of the dividend on Sasol
Preferred Ordinary Shares in proportion to their effective interest
in Sasol's issued share capital, from the commencement of the
fourth year of the Transaction term, subject to the financing
requirements of Groups FundCo. At the end of the Transaction term,
the Sasol Preferred Ordinary Shares will automatically be Sasol
ordinary shares and will then be listed on the JSE. At the time,
Sasol ordinary shares may need to be sold to redeem the preference
share funding and to pay any costs and taxes incurred by Groups
FundCo. The Sasol ordinary shares remaining in Groups FundCo may
then be distributed to the Selected Participants in proportion to
their shareholding in Groups InvestCo. 8.3 Subscription by Groups
FundCo for Sasol Preferred Ordinary Shares Groups FundCo will
subscribe for 9,5 million Sasol Preferred Ordinary Shares funded by
equity from Selected Participants through Groups InvestCo and
preference share funding. Other than Abrina, the Selected
Participants will subscribe for ordinary shares in Groups InvestCo
by contributing equity equal to 5% for their first R50 million
allocation of Sasol Preferred Ordinary Shares and 10% of the value
of their effective allocation in excess of R50 million. Abrina will
contribute equity equal to 5% for its entire allocation as it
facilitates the participation of the franchisees' employees who are
unable to contribute any equity. 8.4 Governance The Selected
Participants will be entitled to appoint directors to the boards of
Groups FundCo and Groups InvestCo. The boards of directors of
Groups InvestCo and Groups FundCo will comprise the same
individuals. The majority of the directors must be Black People and
not less than 40% must be black women. Groups FundCo will, from
inception, have full voting and economic rights with regard to its
1,5% of Sasol's issued share capital. 9. Participation by the Black
Public 9.1 Introduction The aim of the Sasol Inzalo Black Public
Invitations is to provide as many Black People as possible the
opportunity to acquire shares in Sasol. Participants in the
invitations will be Black People and Black Groups, including
partnerships, trusts and unincorporated groups such as 'stokvels'.
The Black Public could own 3% of Sasol's issued share capital,
through their participation in the Funded Invitation and Cash
Invitation. The total number of Sasol Preferred Ordinary Shares and
Sasol BEE Ordinary Shares issued to the Black Public under the
Sasol Inzalo Black Public Invitations will not exceed 18,9 million
shares or 3% of Sasol's issued share capital. The Sasol Inzalo
Black Public Invitation will be launched on or about 22 May 2008.
The National Empowerment Fund ("NEF") and Sasol have entered into a
memorandum of understanding in terms of which it has been agreed
that the NEF will assist Sasol with the implementation of the Sasol
Inzalo Black Public Invitations. The NEF's experience in designing,
structuring and implementing similar schemes, also places it in a
unique position to assist Sasol with the implementation of the
Sasol Inzalo Black Public Invitations. 9.2 Subscriptions in terms
of the Sasol Inzalo Black Public Invitation In order to achieve the
aim set out in paragraph 9.1 above, an aggregate of 18,9 million
Sasol Preferred Ordinary Shares and Sasol BEE Ordinary Shares will
be made available for allotment and issue to the Black Public. It
is anticipated that approximately 16,1 million Sasol Preferred
Ordinary Shares and approximately 2,8 million Sasol BEE Ordinary
Shares will be subscribed for by the Black Public under the Sasol
Inzalo Black Public Invitations. The actual number of Sasol
Preferred Ordinary Shares and Sasol BEE Ordinary Shares issued will
be dependent on the subscriptions received under the respective
invitations pursuant to which Sasol will adjust the number of
issued shares under each invitation such that the total number of
shares issued to the Black Public will not exceed 18,9 million.
Funded Invitation Public FundCo will subscribe for up to 18,9
million Sasol Preferred Ordinary Shares as explained in paragraph
3,3 at the Issue Price funded by equity from the Black Public
through Public InvestCo and preference share funding. The Issue
Price represents a discount of approximately 11% to the Sasol
closing share price on 18 March 2008. The Black Public will
subscribe for ordinary shares in Public InvestCo by contributing
cash equal to 5% of the Issue Price for the first 100 shares and
10% of the Issue Price for any subscription in excess of 100
shares. Cash Invitation The Black Public will subscribe for up to
18,9 million Sasol BEE Ordinary Shares as explained in paragraph
3.3 at the Issue Price. Although the Black Public will be required
to contribute 100% of the subscription consideration, the Issue
Price represents a discount of approximately 11% to the Sasol
closing share price on 18 March 2008. 9.3 Terms for participation
by the Black Public in the Funded Invitation The Funded Invitation
makes use of funding facilitated by Sasol in Public FundCo to
reduce the cash contribution required from the Black Public.
Sasol's objective is to make the Funded Invitation accessible to as
many Black People and Black Groups as possible. Accordingly, the
minimum subscription will be for 25 shares, which will represent a
minimum subscription of R 458 at the Issue Price. In order to
ensure the broadest possible base of participants in the Funded
Invitation, it is envisaged that the allocation of shares to the
Black Public will be made, in Sasol's discretion, from the bottom
up, starting with applications for the smallest number of shares.
Participants in the Funded Invitation may not dispose of their
ordinary shares in Public InvestCo for the first three years after
inception. Thereafter, for the remainder of the Transaction term,
trading of the Public InvestCo ordinary shares will be allowed with
other Black People or Black Groups through an over-the-counter
trading mechanism. Participants in the Funded Invitation may not
encumber their shares in Public InvestCo before the end of the
Transaction term. The Black Public will be entitled to receive a
dividend of up to 5% of the dividend on the Sasol Preferred
Ordinary Shares in proportion to their effective interest in
Sasol's issued share capital, from the commencement of the fourth
year of the Transaction term, subject to the financing requirements
of Public FundCo. At the end of the Transaction term, the Sasol
Preferred Ordinary Shares will automatically be Sasol ordinary
shares and will then be listed on the JSE. At the time, Sasol
ordinary shares may need to be sold to redeem the outstanding
preference share funding and to pay any costs and taxes incurred by
Public FundCo. The Sasol ordinary shares remaining in Public FundCo
may then be distributed to the Black Public in proportion to their
shareholding in Public InvestCo. 9.4 Governance of Public FundCo
and Public InvestCo The shareholders of Public InvestCo will be
entitled to appoint directors to the boards of Public FundCo and
Public InvestCo. The boards of directors of Public FundCo and
Public InvestCo will comprise the same individuals. The majority of
the directors must be Black People and not less than 40% must be
black women. Public FundCo will, from inception, have full voting
and economic rights with regard to its interest in Sasol's issued
share capital. 9.5 Terms for participation in the Cash Invitation
The Cash Invitation allows members of the Black Public that so
choose to invest directly in Sasol BEE Ordinary Shares at the Issue
Price. The minimum subscription will be for 10 shares or such other
number of shares as may decided by Sasol in its discretion, which
will represent a minimum subscription of R 3 660 at the Issue
Price. This invitation aims to cater for investors with more funds
available to invest, who wish to obtain direct exposure to Sasol
shares and who may have a shorter investment time horizon.
Participants in the Cash Invitation will receive dividends per
share simultaneously with, and equal to, Sasol ordinary
shareholders. In addition, they will be entitled to exercise the
voting rights attaching to their Sasol BEE Ordinary Shares.
Participants in the Cash Invitation will be entitled to encumber
their Sasol BEE Ordinary Shares, provided that these shares
continue to be owned by members of the Black Public for the
duration of the Transaction term. In order to ensure the broadest
possible base of participants in the Cash Invitation, it is
envisaged that the allocation of shares to the Black Public will be
made, in Sasol's discretion, from the bottom up, starting with
applications for the smallest number of shares. At the end of the
term of the Transaction, the Sasol BEE Ordinary Shares will
automatically be Sasol ordinary shares and will then be listed on
the JSE. Should circumstances so require, Sasol may amend the
structure relating to the Cash Invitation and, if so, shareholders
will be advised of the change in the Circular. 10. Funding of
Selected Participants and Black Public participating in Funded
Invitation The Selected Participants and the Black Public
participating in the Funded Invitation will indirectly participate
in Sasol through their respective interests in Groups InvestCo and
Public InvestCo (collectively, the "Investment Companies") and the
Funding Companies. 10.1 Subscription by the Funding Companies for
Sasol Preferred Ordinary Shares and the funding thereof The Funding
Companies will subscribe for Sasol Preferred Ordinary Shares in
Sasol's issued share capital at the Issue Price. The subscription
will be funded by a combination of: -- equity received from the
Investment Companies; -- preference shares (A, B and C Preference
Shares) subscribed for by the Financing Institutions; and -- D
preference shares subscribed for by Sasol ("D Preference Shares").
The funding that is required by Groups FundCo and Public FundCo to
subscribe for Sasol Preferred Ordinary Shares at the Issue Price is
outlined in the table below. Funding required (R million) Sources
of funding Groups FundCo Public FundCo* Total EQUITY 220 400 620
PREFERENCE SHARES 3 256 5 510 8 766 A Preference Shares 900 1 530 2
430 B Preference Shares 450 765 1 215 C Preference Shares 950 1 900
2 850 D Preference Shares 956 1 315 2 271 Total 3 476 5 910 9 386 *
assuming that 16,1 million Sasol Preferred Ordinary Shares will be
subscribed for by Public FundCo at the Issue Price and that 2,8
million Sasol BEE Ordinary Shares will be subscribed for by the
Black Public, under the Cash Invitation, at the Issue Price Equity
contributions R 220 million of equity will be required to fund
Groups FundCo. The Selected Participants that have accepted the
invitation to participate are expected to contribute R 170 million
through their investment in Groups InvestCo. The remainder of the
equity will be contributed by the Groups Facilitation Trust. It is
estimated that an amount of R400 million will be contributed as
equity by the Black Public. Preference share funding The A, B and C
Preference Shares will be raised in the market by the appointed
arrangers namely Rand Merchant Bank, a division of FirstRand Bank
Limited, and The Standard Bank of South Africa Limited (the
"Arrangers"), through a competitive bidding process. Sasol has
received funding commitments from the Financing Institutions and is
in the process of concluding the funding agreements. The average
cost of the preference share funding raised, as at 18 March 2008,
is estimated to be 10,8% per annum. The A Preference Shares
totalling approximately R 2 430 million in value will be senior
preference shares with a fixed dividend rate linked to the prime
lending rate. It is anticipated that 50% or more of the initial
capital of the A Preference Shares will be redeemed over the term
of the Transaction (commencing after the expiry of three years from
the commencement of the Transaction term). The A Preference Shares
will be secured against the ordinary shares in the relevant Funding
Company held by the relevant Investment Company. Neither of the
Funding Companies is permitted to dispose of or encumber the Sasol
Preferred ordinary Shares and other assets owned by such Funding
Company. The B Preference Shares totalling approximately R 1 215
million in value will be mezzanine preference shares with a fixed
dividend rate linked to the prime lending rate. The dividends on
the B Preference Shares will be fully serviced over the term of the
Transaction but no preference shares will be redeemed during this
period. The B Preference Shares will be subordinated to the A
Preference Shares. The C Preference Shares totalling a minimum of R
2 850 million in value will be issued at a floating dividend rate
linked to the prime lending rate. The C Preference Shares will
receive some cash dividends from the start of the seventh year
after the commencement of the Transaction, but the majority of the
dividends will accumulate and will be settled at the end of the
Transaction term. The C Preference Shares will be subordinated to
the A and B Preference Shares and secured against a Sasol
guarantee. Sasol will subscribe for D Preference Shares to fund the
shortfall of R 2 271 million between the amount required to
subscribe for the Sasol Preferred Ordinary Shares and the aggregate
funding raised through the equity contributions from Selected
Participants and the Black Public participating in the Funded
Invitation and the issue of the A, B and C Preference Shares. The D
Preference Shares will be issued at a floating dividend rate linked
to the prime lending rate and will be subordinated to the A, B and
C Preference Shares. The D Preference Shares will not receive any
cash dividends for the duration of the transaction but will, in all
other respects, have substantially the same rights, privileges and
conditions as the C Preference Shares. Should the subscriptions
received in terms of the Funded Invitation differ from the
subscriptions envisaged in paragraphs 3.3, the funding packages for
the A, B and C Preference Shares can be adjusted up to a maximum
aggregate amount of R6 900 million. 11. Facilitation by Sasol Sasol
intends to facilitate the Transaction as follows: -- in respect of
the Employee Schemes, Sasol will fully facilitate the acquisition
of the Sasol Ordinary Shares at nominal value by the Employee
Trusts, subject to Sasol's Repurchase Right at the end of the
Transaction term; -- Sasol will fully facilitate the acquisition of
the Sasol ordinary shares at nominal value by the Foundation,
subject to Sasol's Repurchase Right at the end of the Transaction
term; -- in respect of the Funding Companies: -- Sasol will
facilitate the subscription for C Preference Shares by Financing
Institutions through the provision of a guarantee; -- Sasol will
subscribe for D Preference Shares to fund the shortfall between the
amount required to subscribe for the Sasol Preferred Ordinary
Shares and the aggregate funding raised through the equity
contributions from Selected Participants and the Black Public and
the issue of the A, B and C Preference Shares; and -- Sasol will
fund the Groups Facilitation Trust and the Public Facilitation
Trust to subscribe for shares that are not subscribed for by
Selected Participants and the Black Public; and -- issuing the
Sasol Preferred Ordinary Shares and the Sasol BEE Ordinary Shares
at the Issue Price which is below the closing price of R 410 per
share as at 18 March 2008. The impact of Sasol's facilitation
("share-based payment charge"), which is a non-cash cost with no
impact on the net asset value of the Company, is expected to be
approximately R 7 082 million for the duration of the Transaction.
This equates to 2,8% of Sasol's market capitalisation which is in
line with comparable, recently concluded, BEE transactions. The
share- based payment charge is calculated in accordance with
International Financial Reporting Standard ("IFRS") 2 - Share-based
Payment, and is further based on the Issue Price and other
prevailing market conditions. Changes in the closing price of the
Sasol ordinary share at 18 March 2008 and at the date on which all
relevant conditions are fulfilled, as well as changes in the other
market conditions, could give rise to significant movements in this
expense. 12. Illustrative pro forma financial effects The unaudited
pro forma financial effects of the Transaction and in particular
the specific issues of shares for cash, which are the
responsibility of the Sasol directors, have been prepared for
illustrative purposes only and, due to the nature thereof, they may
not fairly represent Sasol's financial position, changes in equity,
results of operations or cash flows. The unaudited pro forma
financial effects assume that the Transaction had been fully
implemented on 1 July 2007. It does not purport to be indicative of
what the financial results would have been had the Transaction been
implemented on a different date. The unaudited pro forma financial
effects of the Transaction are based on the assumptions set out in
the notes below and include assumptions on the closing share price
which can only be determined in the future. The unaudited pro forma
financial effects are presented in a manner consistent in all
respects with IFRS and Sasol's accounting policies. The Transaction
has a positive effect on Sasol's net asset value per share and a
marginal impact on the unaudited pro forma annualised earnings
excluding the share-based payment charge. The unaudited pro forma
financial effects of the Transaction are set out in the table
below: Percentage Percentage change(%) change(%) Before(1) After
(six months) (annualised)(2) Attributable earnings per share(4)
cents 1 505 943 (37,3) (21,2) Attributable earnings per share
(excluding the share-based payment charge)(4) cents 1 505 1 484
(1,4) (0,8) Diluted earnings per share(5) cents 1 485 931 (37,3)
(21,2) Headline earnings per share cents 1 456 895 (38,6) (21,9)
Net asset value per share cents 10 147 10 249 1,0 - Net tangible
asset value per share cents 9 946 10 049 1,0 - Weighted average
number of shares in issue(6) million 607,7 610,7 0,5 - Diluted
weighted average number of shares in issue(7) million 616,0 619,0
0,5 - Notes and assumptions: 1. The unaudited pro forma financial
information before the implementation of the Transaction is based
on the reviewed financial position of the Sasol Group at 31
December 2007 and the results of its operations for the six months
ended 31 December 2007. 2. The results of the Sasol Group's
operations for the six months ended 31 December 2007 has been
annualised, purely for illustrative purposes, in order to
demonstrate the impact of the Transaction on Sasol for a full year.
The unaudited pro forma financial effects of the Transaction for
the six months ended 31 December 2007 are distorted due to a
significant portion of share-based payment charge (which is
discussed in note 4 below) being recognised immediately at
implementation. 3. The unaudited pro forma financial information
per share after the Transaction is based on the assumptions that:
a. the Transaction was implemented with effect from 1 July 2007 for
calculation of the income statement effects and on 31 December 2007
for calculation of the statement of financial position effects; b.
34,7 million Sasol ordinary shares were issued, at nominal value of
R0,01 per share, to the Employee Trusts and the Sasol Inzalo
Foundation; c. 25,6 million Sasol Preferred Ordinary Shares were
issued to the Funding Companies at the Issue Price of R 366 per
share, which represents a discount of approximately 11% to the
Sasol closing price of R 410 per share on 18 March 2008; d. 2,8
million Sasol BEE Ordinary Shares were issued to the Black Public
under the Cash Invitation at the Issue Price; e. the Employee
Trusts, Sasol Inzalo Foundation and the Funding Companies are
consolidated for accounting purposes. In this regard any shares
issued to these entities are regarded as treasury shares for
accounting purposes and are excluded from the above calculations;
f. the preferred ordinary dividend per share in respect of the 25,6
million Sasol Preferred Ordinary Shares issued to the Funding
Companies for the six months ended 31 December 2007 amounts to
R16,00 per annum; g. based on prevailing market rates, the average
cost of the preference share funding raised as at 18 March 2008 is
estimated at 10,8% per annum; and h. the impact of all other
movements in cash have been calculated at the average of the
relevant prevailing market rates over the six months ended 31
December 2007. 4. In accordance with IFRS 2 - Share-based Payment,
attributable earnings for the six months ended 31 December 2007 has
been reduced by R 3 303 million. The total share-based payment
charge for the Transaction amounts to R 7082 million for the full
Transaction term. The facilitation by Sasol giving rise to the
share-based payment charge is outlined in paragraph 11. The
share-based payment charge associated with the Employee Trusts
amounts to R 4 221 million for the full Transaction term and will
be expensed in the income statement over the ten year period. The
charge for the six months ended 31 December 2007 therefore amounts
to R 442 million. The share-based payment charge of R 2 861 million
attributable to the participation of the other BEE Shareholders is
recognised immediately in the income statement when all relevant
conditions have been fulfilled. 5. The diluted earnings per share
is calculated by dividing earnings by the diluted weighted average
number of shares in issue for the period. The weighted average
number of shares excludes the shares issued to the 6. Employee
Trusts, the Foundation and the Funding Companies, which shares are
treated as treasury shares. The weighted average number of shares
includes the 2,8 million Sasol BEE Ordinary Shares issued to the
Black Public under the Cash Invitation. 7. The diluted weighted
average number of shares in issue for the period ended 31 December
2007 does not assume the effect of any Sasol ordinary shares that
may be sold in order to settle the outstanding debt under the A and
B preference share funding as the effect thereof is anti- dilutive.
13. Fulfilment of conditions The Transaction is subject to the
fulfilment of the following conditions: -- the signature of the
agreements required to implement the Transaction; -- the approval
by Sasol's shareholders of the Transaction; -- the approval by the
JSE of the Transaction; and -- registration of the special
resolutions by the Companies and the Intellectual Property
Registration Office ("CIPRO"). 14. Fairness opinion The Board has
appointed Deloitte to prepare a fairness opinion in respect of the
terms of the Sasol Preferred Ordinary Shares and the Sasol BEE
Ordinary Shares. Deloitte has advised the Board, on a preliminary
basis, that the terms of the Sasol Preferred Ordinary Shares and
the Sasol BEE Ordinary Shares are fair to Sasol shareholders.
Deloitte's fairness opinion will, however, be formalised and
finalised at the last practicable date prior to the publication of
the relevant Circular to Sasol shareholders and will be based on
financial, regulatory, securities market and other conditions
prevailing at that time. 15. Salient dates and times 2008 Circular
and notice of general meeting posted to Sasol shareholders on
Monday, 21 April Last day for receipt of forms of proxy for the
general meeting by 09:00 on Thursday, 15 May General meeting to be
held at 09:00 at the registered office of Sasol on Friday, 16 May
Results of the general meeting released on SENS on Friday, 16 May
Special resolutions lodged with CIPRO on or about Monday, 19 May
Results of the general meeting published in the press on Monday, 19
May These dates and times are subject to change. Any material
change will be published on SENS and in the press. 16. General
meeting A general meeting of shareholders ("General Meeting") will
be held at 09:00 on Friday, 16 May 2008, at the registered office
of Sasol, 1 Sturdee Avenue, Rosebank, Johannesburg, 2196, to
consider and, if deemed fit, pass, with or without modification,
the special and ordinary resolutions required to implement the
Transaction. 17. Further documentation A Circular setting out the
full terms of the Transaction and convening the General Meeting
will be posted to shareholders on or about 21 April 2008. A
prospectus containing the details of the Sasol Inzalo Black Public
Invitations will be made available at selected South African Post
Offices in due course. 18. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that caution is no longer required when
dealing in their Sasol ordinary shares. Rosebank 25 March 2008
Merchant bank and transaction sponsor RAND MERCHANT BANK (A
division of FirstRand Bank Limited) Legal adviser Edward Nathan
Sonnenbergs Inc Independent expert Deloitte & Touche Corporate
Finance Reporting accountants and auditors KPMG Inc. Sponsor
Deutsche Securities (SA) (Proprietary) Limited 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 21 November 2007 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. Sasol Limited
Incorporated in the Republic of South Africa (Registration number:
1979/003231/06) JSE share code: SOL NYSE share code: SSL ISIN:
ZAE000006896 US8038663006 ("Sasol" or "the Company")
http://www.newscom.com/cgi-bin/prnh/20080324/NYTU021 DATASOURCE:
Sasol Limited CONTACT: The Sasol Investor Relations Team,
+27-11-441-3113, +27-11-441-3563, +27-11-441-3321,
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