Sasol’s South African gas network sale sees Engie and AIIM among bidders – sources

25 May 2021 - 08:25 am UTC

by Patrick Harris and Stefano Berra

Sasol’s [JSE:SOL] [NYSE:SSL] sale of its South African gas transmission and distribution business has garnered attention from French energy giant Engie [EPA:ENGI], two sources familiar with the matter said.

 

African Infrastructure Investment Managers (AIIM) and its investment partners have also expressed interest, one of these and a third source familiar said. These investors are the winning bidders for Sasol’s 30% interest in ROMPCO (Republic of Mozambique Pipeline Investments Company), the sources noted.

 

On 14 May, Sasol announced that a consortium comprising Reatile Group and the IDEAS Fund, managed by AIIM, acquired the ROMPCO stake for ZAR 4.145bn (USD 292m) initially and a deferred payment of up to ZAR 1bn.

 

Engie had also bid in the ROMPCO sale, as per reports by this news service.

 

Africa-focused sponsor Helios Investment Partners also remains in contention as a bidder in the ongoing sale process, codenamed Project Trout, the sources said.

 

Mergermarket previously reported Helios’ involvement, further noting that a number of Black Economic Empowerment (BEE) investors and local and international infrastructure funds had also shown first-round interest.

 

The second phase of the auction is to start imminently, one of the sources said. Sasol wanted to finalise the sale of the ROMPCO stake before proceeding with Trout, this source said.

 

While some of the bidders took part in both processes, the two assets are different and there is much more interest in Trout, the source added.

 

The gas network business could reach a valuation of around USD 300m to USD 400m, according to the previous report. Sasol is advised on the process by Absa.

 

Sasol has undertaken a series of divestments to right its balance sheet, including selling a 50% interest in its Lake Charles chemicals plant in the US for USD 2bn, its 50% interest in its Gemini HDPE venture – a toll-manufacturer of bimodal high-density polyethylene products – for USD 404m, and a 27.8% interest in the Etame Marin block offshore Gabon for USD 45m.

 

On 12 April, this news service reported that the company has hired Barclays to conduct a sale of its Mozambique upstream assets in a sale codenamed Marlin.

 

Improvements in Sasol’s share price mean that it is no longer considered a forced seller of assets, according to the previous report by this news service.

 

Sasol trades at ZAC 22,172/share with a ZAR 139.63bn market capitalisation, compared to lows of ZAC 2,714/share in March 2020.

 

Helios and AIIM declined to comment. Sasol and Engie did not return requests for comment.