State-owned energy companies from South Africa and Mozambique have exercised their rights to buy the 30 percent stake in the ROMPCO natural gas pipeline that Sasol is selling, the companies said on Sunday.
According to Reuters, petrochemical firm Sasol said last month it was selling the stake in the ROMPCO pipeline from Mozambique to South Africa to a consortium of investors including Reatile Group for an initial amount of 4.15 billion rand ($293 million).
However, according to the report, the deal was subject to pre-emptive rights on the shares held by existing shareholders iGAS, a subsidiary of South Africa’s Central Energy Fund, and Companhia Moçambicana de Gasoduto (CMG), a subsidiary of Mozambique’s Empresa Nacional de Hidrocarbonetos.
iGAS and CMG will now increase their stakes in ROMPCO to 40 percent each from their current level of 25 percent. Sasol, which is trying to shed assets to pay off debt, will reduce its shareholding from 50 percent to 20 percent.
The transaction will be fully funded from past and future dividends generated by the 865-kilometre pipeline, the Central Energy Fund and Empresa Nacional de Hidrocarbonetos (ENH) said in a joint statement.
“Having both governments as majority shareholders of the cross-border pipeline is strategic, since the pipeline is the single source of gas to the South African market,” ENH Chief Executive Estêvão Pale said.
Sasol said in a statement: “We can confirm that Sasol has received pre-emptive rights notices and will now review the notices. We believe that the successful partners will add significant value to this important regional energy asset.”
($1 = 14.1412 rand)