Sasol Inzalo scheme delivers windfall for BEE shareholders
A 25% surge in the share price in the past three months has delivered an unexpected windfall for Sasol’s empowerment scheme shareholders.
Sasol Inzalo’s public shareholders will receive a R1.3bn payout — R85.63 a share — next Monday, the chemicals and synfuels producer announced.
The return of an effective 19% per annum to the scheme’s participants came as a surprise to some because Inzalo had been under water in recent years.
The scheme launched at R366 a share in 2008 with some R7bn in debt finance. There were five categories of participating shareholders, but the majority were the Sasol Inzalo public shareholders — black South Africans invited to buy shares at a discounted price of R18.30 or R36.60 a share.
The scheme needed a Sasol share price of R462 to repay the debt, but since mid-2016 the price was often below R400 until it began to rise with the oil price in 2018.
Avior Capital Markets analyst Wade Napier said that over the past 30 days Sasol’s average share price was R542, making the scheme profitable for shareholders. Craig Gradidge, investment and retirement planning specialist at Gradidge Mahura Investments, said the return for shareholders was substantial.
If a shareholder was allocated 100 shares, it would have cost them R1,800 in 2008. Now they will get a dividend of R7,311, said Gradidge, who himself is an Inzalo shareholder.
Those Inzalo participants who accepted Sasol’s invitation to participate in its new empowerment scheme, Sasol Khanyisa, received 100 such shares free. They also received 10 Sasol black economic empowerment ordinary shares worth R2,690.
A R200 dividend received some years ago must also be factored in.
Gradidge said Inzalo’s public shareholders will receive R10,201 back from an investment of R1,800, a return of 19% per annum.