S.Africa's biggest black empowerment deal announced

JOHANNESBURG, Sept 10 (Reuters) - Sasol, the world's top maker of oil from coal, on Monday announced the biggest black empowerment deal in South African history.

Sasol, which was previously sharply criticised by the government for dragging its feet on Black Economic Empowerment (BEE), said it would sell 10 percent of the company to blacks for 17.9 billion rand ($2.5 billion).

It said the stake would go to the black public, mainly-black staff and black investor groups in line with BEE, which is designed to widen ownership of the South African economy -- still in mainly white hands 14 years after the end of apartheid.

"We want as many black South Africans as ... possible, most of whom have never owned shares before, to become shareholders," said Sasol chief executive Pat Davies.

It was the second major BEE deal in less than a week after the world's biggest platinum producer, Anglo American Platinum Ltd, said it would sell mines to black investors and hand shares to black workers in a transaction worth 10.9 billion rand ($1.5 billion).

"This transaction is ground breaking, not only in terms of size but also in its overarching ambition to create a legacy of building skills," Sasol Chairman Pieter Cox said.

Some 1,585 BEE deals valued at 341.8 billion rand ($47 billion) were done from 1994 to the end of 2006, according to data from financial services firm Ernst & Young.

Under its previous management, when Cox was chief executive, Sasol came under fire from the government for a lack of senior black managers.

But since Davies took over two years ago, he has given priority to bringing in more black staff and investors.

He appointed top black managers and sent Trevor Munday, a white deputy chief executive, into early retirement.


POLITICALLY-CONNECTED

The BEE programme has been criticised by unions and opposition politicians who say it benefits a small group of politically-connected black businessmen to the exclusion of the vast majority of poor black South Africans.

Critics say some BEE deals have favoured a small black business elite and the same names have repeatedly cropped up to front black consortiums buying a stake in various companies.

Dirk Hermann, deputy general secretary of traditionally white trade union Solidarity, welcomed Sasol's initiative, saying it would motivate employees.

AngloPlat, which has also been under government pressure to speed up its BEE participation, said its deal would put some 35 billion rand ($4.8 billion) of assets into black hands.

Apart from ownership, the government is pushing South African companies to meet quotas on employment and procurement.

But it said last year it would investigate the success of the programme after a black business group complained that little progress had been made in transferring wealth into black hands.







source:Reuters