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TOSACO Achieves Unencumbered 25% Stake In Total South Africa
TOSACO Achieves Unencumbered 25% Stake In Total South Africa Ahead Of Schedule; Eyes Greater Role In Liquid Fuels Sector
R1 billion loan plus interest paid off almost two years early
Johannesburg, 04 November 2011
– TOSACO (Total South Africa Consortium), the Broad-Based Black Economic Empowerment grouping that entered into an agreement to acquire 25% of Total South Africa eight years ago, has fully paid for its stake in the local petroleum company almost two years ahead of schedule and is now looking forward to using its unencumbered ownership status as a springboard to play a bigger role in the industry.
Significantly, TOSACO has become the first BBBEE consortium to own an unencumbered stake in the local operations of an international oil major with a presence in South Africa.
The 12-member consortium acquired its stake in Total South Africa in May 2003 at a total cost of R1 billion, scheduled to be paid for over a period of 10 years. The consortium also has three representatives on the Total South Africa board of directors.
With the government-motivated Charter for the South African Petroleum and Liquids Fuels Industry acting as the catalyst, the transaction was facilitated by Total South Africa and financed by Nedbank. The structure of the transaction played an important part in the success of the deal which provided upside for the consortium, while the downside was limited. A highly interactive and participative process was also followed to ensure that all the parties involved were committed to a successful outcome.
Total South Africa - which has annual turnover of around R20 billion and a share of around 15% in the local liquid fuels market - is a 36% shareholder in the NATREF
crude oil refinery, a 19% shareholder in the SAFOR base oil refinery and a 30% shareholder in bitumen producer TOSAS. It also has wholly-owned subsidiaries in Namibia, Botswana, Lesotho and Swaziland.
Total South Africa has the following ownership structure: Total Overseas Holding (ultimately Total S.A.) 50.1%, TOSACO 25% and Remgro Ltd 24.9%.
“We cannot underestimate the role big business plays in promoting empowerment. At Total we understand this obligation and embrace transformation at all levels of our business” said
Jean-Denis
Royère
Managing director and CEO of Total south Africa.
“Transformation is closely aligned to the pillars of our mission. Through a supportive business culture, we embrace diversity and transparency and strive to create a company that caters for the diversity of our staff.”
The repayment of the loan marks the beginning of a new chapter on the journey to fully transform and grow our business,” concluded Roy
ère.
TOSACO, which was carefully put together to attain a spread of appropriate members, is led by Calulo Investments, an integrated petroleum services and logistics investment group with an effective 31% stake in the consortium.
Other leading shareholders include Southbase Investment Holdings and the TOSACO Trust – established for the benefit of Total South Africa’s employees - with just over 8%. The women-owned and led Nosina Investment Projects and The Disability Employment Concern Trust are also significant members of the consortium, along with Kgorong
Investment Holdings, Quantum Leap Investments, Skotaville Energy and Umnotho We Sizwe Investment Holdings.
Commenting on the completion of the financial side of the transaction, TOSACO chairman, Mkhuseli Faku, paid tribute to the “robust” model that had been crafted to make sure that it worked for all the parties involved.
“It is testimony to the commitment and dedication of Total in Johannesburg and in Paris, the TOSACO members, and the various advisers involved that this transaction has been fully paid for ahead of schedule,” said Faku.
“This is an excellent example of successful ownership transformation in the local petroleum industry and demonstrates what can be done through proper planning, strategizing, negotiation and interaction towards achieving a common goal.”
Faku said now that TOSACO had an important unencumbered stake in one of the country’s leading petroleum companies, it wanted to play a more operational role in the energy sector. He said he also wanted to see more progress being made in other aspects of transformation in the petroleum and energy sectors – such as female participation, procurement, skills development and enterprise development.
“Off the base of this important investment, the Calulo Group has developed an integrated services offering to the petroleum sector in Southern Africa and will continue to enhance the participation of not only the TOSACO consortium, but also other new empowerment enterprises in the sector.”
Mike du Toit, CEO of the Disability Employment Concern Trust, said Total South Africa is the only company in the energy sector in South Africa to include a disability component in its ownership structure.
“Our stake in TOSACO is one of the most valuable debt-free investments in our portfolio. Total South Africa is playing a leading role in the South African Employers for Disability Forum and has an extremely progressive disability policy,” he said.
Importantly, TOSACO is also doing its bit towards developing skills through a scholarship programme, called Vhukoni, which was started in 2005. By next year it will be funding the studies of ten students, all of whom will be offered internships within TOSACO member companies or within Total South Africa’s operations.
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