Continental Focus, International Reach

OTS Completes Chevron South Africa Buy

Thursday, November 22, 2018

Off the Shelf Investments (OTS), Glencore’s Black Economic Empowerment (BEE) in South Africa, has completed the $973 million acquisition of Chevron’s downstream assets in South Africa. The transaction is being funded by Glencore and comes after South Africa’s Competition Tribunal gave a conditional approval earlier this in Q3 of this year.

OTS already holds a 23% stake in Chevron South Africa (CSA), the latest stake acquisition gives the company a total of 98% of the company. The remaining 2% in CSA is to be held by the company employees. Upon closing of the deal, CSA is now to be called Astron Energy

The acquisition includes a 100,000 bpd refinery in Cape Town, a lubricants plant in Durban, and 850 service stations and storage facilities. The transaction also gives OTS a 100% stake in Chevron Botswana.

Under the terms of the deal, OTS has committed to invest $500 million to develop the Cape Town refinery.

OTS chairperson Mashudu Ramano was quoted by as saying “CSA will retain the right to use the Caltex brand, which has been in operation for over 100 years and grown to become a household name across the region, for a period of up to six years.”

OTS intends to exercise its option to repay the funding secured from Glencore and retain its shareholding, Ramano said.

He further noted that Glencore has the option to buy the shares.