With the transaction, Sasol is expected to reduce its stake in the pipeline from 50% to 20%
iGas, CMG to acquire 30% stake in Rompco pipeline. (Credit: David Mark from Pixabay.)
South Africa and Mozambique’s state-owned energy companies have exercised their rights to acquire 30% stake held by Sasol in the ROMPCO natural gas pipeline.
iGas, a subsidiary of South Africa’s Central Energy Fund and Companhia Mocambicana de Gasoduto (CMG), a subsidiary of Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH) will acquire the stake.
Sasol owns 50% stake in the 865km Rompco pipeline that transports the fuel from deposits in Mozambique to its operations in South Africa.
Last month, the petrochemical firm had agreed to sell its stake in pipeline to a consortium comprising a unit of Old Mutual, for an initial amount of 4.15bn rand ($293m).
The deal was subject to pre-emptive rights on the shares held by existing shareholders of iGAS and CMG.
Sasol said: “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.”
With the transaction, the state-owned companies iGAS and CMG are expected to increase their stakes in ROMPCO to 40% each from their current 25% stake, Reuters reported.
Sasol said that its decision to sell its assets to pay off debt, and the transaction will reduce its stake from 50% to 20%.
The transaction will be fully funded from past and future dividends generated by the pipeline, the Central Energy Fund and ENH.
ENH chief executive Estêvão Pale was quoted by the news agency as saying: “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.”