FIN24 / 20 AUGUST 2018 - 16:43 / SIBONGILE KHUMALO
Sasol won’t change the prerequisites for inclusion in its new Broad-Based Black Economic Empowerment (B-BBEE) share scheme which has been rejected by trade union Solidarity for excluding white employees, the group’s Joint President and CEO Stephen Cornell said on Monday.
Speaking after the presentation of the energy and chemical company’s annual financial results, Cornell said the company had noted the union’s grievances after Solidarity was granted permission to strike over the scheme by dispute resolution body the Commission for Conciliation, Mediation and Arbitration (CCMA) in June.
“We continue to engage with them (Solidarity) to understand their point, but we are not going to change the plan,” said Cornell. “We have been very clear on that,” he said, adding that the scheme was about “economic transformation”.
Solidarity has maintained that the scheme's race-based policy discriminated against its nearly 6 300 workers at Sasol, and would further fuel racial tensions.
Last year, Sasol’s shareholders approved a new R21bn B-BBEE employee shareholding plan called Sasol Khanyisa. The scheme would place 25% of Sasol’s ownership with black South Africans, and would replace Sasol’s previous scheme called Sasol Inzalo.
Inzalo shareholders were previously left reeling when they received no pay-out after the scheme was unable to service debt due to low oil prices and lacklustre share performance.
Cornell said on Monday that the company had done things differently with the financing of Khanyisa which will come into effect from September.
“What we did with Inzalo was that we got a loan to buy the shares, and had a scheme that wasn’t able at the end to pay off the loan and have value left over, because it was based on the expectation that the share price would appreciate enough to be able to pay off the loan,” he said.
Sasol's board has approved the repurchase of Sasol Inzalo and settlement of the outstanding debt of R7.4bn, as well as a cash top-up of nearly R600m in September.
Cornell said Sasol should have done better in communicating the challenges faced by the scheme to shareholders. “We came to the end of Inzalo and people were surprised that there was no value, but we saw it coming.”
Sasol would have to come up with a plan to mitigate the impact of the strike should Solidarity - which represents mostly white employees - decide to go ahead and down tools.
He stated that impact of the scheme was significant to the company, as it was part of ensuring that the petrochemicals group was able to meet the empowerment regulations.
The company reported a dip in net profit from R21.5bn in 2017 to R10bn in 2018.
Production was affected by two power interruptions at its Secunda operations in first half of the financial year.
Sasol’s Secunda operation has its own power generation capacity, but also receives 50% of its electricity from Eskom.
The firm’s liquid sales volumes were down 2%, which company attributed to lower output from the Secunda operations and the Natref refinery.
Revenue, whoever, grew by 5% to R181bn, and the company declared an increase in its final dividend to R7.90, up from R7.80, with a total payment of R12.90 the year to end-June.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER