South Africa has set targets for black ownership as it seeks to redress the economic inequalities stemming from white-minority rule under apartheid that ended in 1994.
Sasol will hold a shareholder meeting in November for investors to approve the proposals for unwinding Inzalo, selling shares and creating the Khanyisa structure, which will include an element of employee ownership.
When Sasol Inzalo lapses, it will not be able to distribute shares to participants, given the closing Sasol ordinary share price of R389 on September 4.
For more than 250,000 Sasol Inzalo investors the share should have reached at least 462 rand by 2018 to break even.
Sasol’s share price has seen dampened growth since the transaction due to oil prices which have fallen by more than 40 percent since 2008.
“We always said we would have a certain amount of dilution at the end of Inzalo, we are just going to have more”, said Joint President and Chief Executive Stephen Cornell.
Sasol must ensure that the Inzalo groups settle their debt of about 12 billion rand, the company said in a presentation on its website.
The scheme paid 7.6 billion rand in dividends, 5.1 billion rand of which was used to pay down debt and the rest as payouts to shareholders and employees in the scheme.
The plan to purchase and then cancel the Inzalo shares, plus any associated costs, will require about 13 billion rand, Chief Financial Officer Paul Victor said.
Sasol Khanyisa is meant to achieve effective direct and indirect B-BBEE ownership of at least 25 percent in Sasol South Africa, a wholly-owned subsidiary of Sasol.
The new transaction, Sasol Khanyisa, will only be funded by the company and will not depend on share price fluctuations.
“We are committed to contributing meaningfully to sustainable transformation as we accelerate this journey across Sasol”, said joint president and CEO Bongani Nqwababa.