BP Sells Industrial Fuels Marketing Business to New Black Empowerment JV
BP has sold its commercial and industrial fuels marketing business to a new black empowerment joint venture company in which BP will have a minority 45% stake and four empowerment partners a majority of 55%.
The new venture, which will market BP branded oils and fuels to the commercial and industrial sector, will be black-owned, black-managed and black-controlled.
This is the first time a major oil company has taken a minority share in an empowerment venture. All other oil industry BEE initiatives have restricted empowerment partners to the minimum 25 % minimum level set by Government in the Oil Industry Charter.
The majority BEE shares are apportioned 35% to the broad-based combination of the Mineworkers Investment Company (Pty) Limited and Women's Development Bank (WDB) Fuel (Pty) in a ratio 70:30, 15% to a Trust representing the senior management of the new company, and the remaining 5% to a second Trust representing the JV employees other than the senior management.
Financing of the new venture will be achieved by through a combination of shareholder loans and bank finance which will be underpinned by BP guarantees to secure attractive lending rates for the venture partners. BP's empowerment partners will contribute R29m towards the shareholder loans.
The joint venture will continue to utilize existing staff and business processes, including health, safety and environmental controls and key marketing offers.
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