11 October 2010
South African petrochemicals giant Sasol has sold a 20% stake in its mining subsidiary to Ixia Coal, a new mining firm that benefits women, as part of a black economic empowerment (BEE) deal worth about R1.8-billion.
The transaction forms part of the company’s empowerment strategy and its commitment to comply with the objectives of South Africa’s Mineral and Petroleum Resources Development Act and the Mining Charter.
Black woman owned and operated firm
Ixia Coal will be 51% owned by WIPCoal Investments, the shareholders of which include Wiphold (Women’s Investment Portfolio Holdings) and a new entrant created by Wiphold, called Mining Women Investments.
The later comprises approximately 5 000 rural and peri-urban black women who have not previously participated in BEE transactions. The women are drawn from the Free State, Mpumalanga and Limpopo provinces, where Sasol Mining has operations and coal reserves. Mining Women Investments was formed following a series of Wiphold workshops with women in the three provinces.
Sasol Mining Holdings has a 49% shareholding in Ixia Coal and has committed itself to establish Ixia Coal as a black women controlled operational mining company with operating capacity, operating assets and growth opportunities.
“The closing of the Ixia Coal transaction is a key milestone in achieving Sasol’s transformation objective,” Sasol Mining MD Hermann Wenhold said in a statement this week. “We set out to create one the country’s first black women owned and operated mining companies.”
Dividend payments ‘from day one’
In terms of the transaction, Ixia Coal Funding, a subsidiary of Ixia Coal, has acquired a 20% shareholding in Sasol Mining. The transaction value is R1.845-billion and is financed through equity and a combination of third party and Sasol funding. The debt will be repaid from future dividends by Sasol Mining.
The transaction is structured in a manner that provides for dividend payments to the shareholders from day one, which means that the shareholders of WIPCoal Investments receive cash dividends from the first year of the investment.
Sasol Mining Holdings and WIPCoal Investments have also entered into a memorandum of understanding that outlines the plan to turn Ixia Coal into an operational company, and are currently in the process of identifying a suitable mining asset to be acquired by Ixia Coal.
Wiphold CEO Louisa Mojela said that apart from having woman just as shareholders in Ixia Coal, the company would actively seek opportunities for them to participate in employment, procurement and enterprise development opportunities that result from the new mining company’s operations.
Mojela said the deal represented “a significant moment in the drive to truly transform mining in South Africa.
“It is also an important step for Wiphold, as it has always been part of our strategy to be operationally involved in mining.”
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