(Bloomberg) – South Africa and Mozambique exercised their right of first refusal to increase their stake in Sasol Ltd.’s Rompco gas pipeline, which runs between the countries, replacing an earlier agreement.
South Africa’s iGas and Mozambique’s Companhia Mocambicana de Gasoduto (CMG) plan to acquire a 30% stake in the line valued at 4.1 billion rand ($ 290 million), according to a statement on Sunday. In May, Sasol agreed to acquire a stake in a group that also includes a unit of the financial services company Old Mutual Ltd. belongs to sell in a transaction that is subject to the waiver or exercise of pre-emptive rights by the shareholders.
“A greater stake in this asset will be an important step” in inter-nation energy collaboration “and support the region’s transition to a low-carbon economy,” said Ayanda Noah, chairman of the Central Energy Fund, which manages iGas in the statement.
South Africa depends on coal for most of its electricity and is the twelfth largest producer of greenhouse gases in the world. The country’s energy plans include sourcing electricity from sources such as renewable technologies and natural gas.
Sasol owns 50% of the 865 kilometer Rompco pipeline that transports fuel from storage facilities in Mozambique to its operations in South Africa. The sale began last year when the chemical and fuel maker accelerated asset sales to pay off debt. The company did not immediately respond to questions sent outside of normal business hours.
The state-owned subsidiaries iGas and CMG each hold a 25% stake, which will increase to 40% after the transaction is completed, while Sasol holds the remaining 20%. “The transaction will be fully funded from past and future dividends generated by Rompco itself,” the statement said.
Read: Sasol to sell 30% stake in Gaspipe in Mozambique for $ 361 million
(Continuous updates with details and reason for the deal)
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