Page 11 - DMEA Week 26 2021

DMEA FINANCE & INVESTMENT DMEA

Mozambique, SA pre-empt Sasol’s

planned sale of ROMPCO stake

AFRICA THE governments of Mozambique and South ENH and CEF are already shareholders in
Africa have decided to pre-empt the planned sale ROMPCO, holding 25% each through affiliates –
of a minority stake in the Republic of Mozam- namely, Companhia Mocambiçana de Gasoduto
bique Pipeline Company (ROMPCO) by Sasol (CMG) and South African Gas Development Co.
(South Africa). (SOC) Ltd, also known as iGas. Their holdings
Sasol reported last month that one of its sub- will rise to 40% each following the acquisition
sidiaries, Sasol South Africa (SSA), had signed a of SSA’s 30% stake, since they intend to split the
sale and purchase agreement (SPA) with a con- asset evenly.
sortium set up by Reatile Group, a black-owned Estevao Pale, the CEO of ENH, said that the
investment firm, and the IDEAS Fund, a domes- deal would benefit Mozambique. “The fact that
tic infrastructure fund managed by African both governments are majority shareholders in
Infrastructure Investment Managers (AIIM). the cross-border pipeline is strategic, as the pipe-
The document provided for SSA to reduce its line is the only source of gas for the South African
stake in ROMPCO, the owner of an 865-km nat- market,” he said.
ural gas pipeline connecting Mozambique and Meanwhile, Ishmael Poolo, the CEO of CEF,
South Africa, from 50% to 20%, it said. commented: “There has been a concerted effort
Now, though, the agreement is being over- to accelerate the acquisition of these shares,
turned, as Mozambique’s national oil company which is a hallmark of the group’s energy value
(NOC) ENH and South Africa’s Central Energy chain investment strategy aimed at reviving the
Fund (CEF) are exercising their right to pre- South African economy and creating the jobs we
empt the sale. They will presumably be paying so badly need.”
for the stake the same price specified in the SPA ROMPCO pumps gas from Pande and
– namely, an up-front payment of ZAR 4.145bn Temane, two fields in southern Mozambique, to
and a deferred payment of ZAR1bn, assuming South Africa. Sasol decided to reduce its stake in
that the group meets certain milestones by June the pipeline company in order to raise cash that
30, 2024. could be used to pay off debts.™

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