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GLENCORE PLC - GLN: Proposed acquisition of shareholdings in Chevron South Africa and Chevron Botswana

Release Date: 06/10/2017 12:19
Code(s): GLN     PDF:  
Wrap Text
GLN: Proposed acquisition of shareholdings in Chevron South Africa and Chevron Botswana

Glencore plc
 (Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
HKSE Share Code: 805HK
ISIN: JE00B4T3BW64

Baar, Switzerland
6 October 2017


   Proposed acquisition of shareholdings in Chevron South Africa and Chevron
                                   Botswana


Glencore has entered into an agreement with Off The Shelf Investments Fifty Six (RF) Proprietary Limited
(OTS) to acquire from OTS (i) a 75% stake in Chevron South Africa Proprietary Limited (Chevron SA)
and certain related interests and (ii) the entire issued share capital of Chevron Botswana Proprietary
Limited (Chevron Botswana) (together the Assets and these companies together the Companies)
following closing of OTS’s exercise of its pre-emptive right to acquire the Assets from the Chevron group.
During its acquisition process Glencore will be supporting OTS as their technical and financial partner.
The aggregate consideration (subject to adjustment for debt and working capital of the Companies at
closing) is US$973 million.

The Assets comprise the interests of the Chevron group in its manufacturing, retail and industrial supply
business in South Africa and Botswana. Glencore believes that the Assets provide an attractive
downstream opportunity for its oil business. The acquisition will include undertakings as to retention of
the local management team and workforce.

The consideration will be payable in cash on closing and will be funded from Glencore’s own cash
resources. Glencore intends to manage its overall oil asset portfolio to ensure that, including this
transaction, net additional capital investment is limited to less than US$500m over the next 12 months,
consistent with Glencore’s conservative financial framework targets.


The transaction is conditional on the receipt of all necessary regulatory approvals by OTS and Glencore
and is expected to close in mid-2018. A further announcement will be made in due course.


For further information please contact:

Investors
Martin Fewings               t: +41 41 709 2880    m: +41 79 737 5642     martin.fewings@glencore.com
Ash Lazenby                  t: +41 41 709 2714    m: +41 79 543 3804     ash.lazenby@glencore.com


Media
Charles Watenphul            t: +41 41 709 2462    m: +41 79 904 3320     charles.watenphul@glencore.com

www.glencore.com

Glencore LEI: 2138002658CPO9NBH955

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Additional Information

Outline summary of the Companies’ businesses

       Medium complexity refinery in Cape Town with a crude processing capacity of 100 kbd
       A finished lubricants blend plant and base oil terminal in Durban
       Broad network of coastal shipping, depots and pipelines with significant crude delivery and
       storage infrastructure at Saldanha Bay and Cape Town Harbour
       The business is the second largest supplier of petroleum products in South Africa with a market
       share of ~19%
       The South African retail network comprises 820 sites, which are predominately owned by the
       operators. There are another 30 retail sites in Botswana. Retail accounts for over 55% of the
       volumes of the business
       Provides oil products to large customers in power, mining, transportation and agriculture through
       several licensed wholesalers and resellers, which accounts for the balance of 45% of volumes.

Assets and profits

Gross assets the subject of the transaction are ZAR 11,399 million and BWP 157 million (together
US$844 million) as at 31 December 2016, as derived from the accounts of the Companies for the year
ended on that date (together the Accounts).

Profits (being the profit before tax) attributable to the Assets being acquired are ZAR 1,860 million and
BWP 32 million (together US$138 million), being that profit for the year ended 31 December 2016 as
derived from the Accounts.

In this announcement:

        the exchange rates used above are those in effect at 31 December 2016, being ZAR13.74 to one
        US dollar and BWP10.69 to one US dollar and the figures take account of 75% of Chevron SA
        and 100% of Chevron Botswana. Applying the rates applicable at the close of business
        yesterday of ZAR 13.68: USD1 and BWP 10.36: US$1, the dollar values in 1. and 2. above are
        US$848million for gross assets and US$139million for profits

        BWP means Botswanan Pula

        ZAR means South African Rand.


Glencore

Glencore is one of the world’s largest global diversified natural resource companies and a major producer
and marketer of more than 90 commodities. The Group's operations comprise around 150 mining and
metallurgical sites, oil production assets and agricultural facilities.

With a strong footprint in both established and emerging regions for natural resources, Glencore's
industrial and marketing activities are supported by a global network of more than 90 offices located in
over 50 countries.

Glencore's customers are industrial consumers, such as those in the automotive, steel, power
generation, oil and food processing sectors. We also provide financing, logistics and other services to
 
producers and consumers of commodities. Glencore's companies employ around 155,000 people,
including contractors.

Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the
International Council on Mining and Metals. We are an active participant in the Extractive Industries
Transparency Initiative.

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Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this
document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to Glencore plc
and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other
relationship between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the
Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the
particular company or companies.


Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking Division)

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