Mboweni faces challenge at Sacoil
FORMER Reserve Bank governor Tito Mboweni today walks into a cauldron of hot oil as he starts his new job as chairman of SacOil after a majority of board members resigned on Friday.
FORMER Reserve Bank governor Tito Mboweni today walks into a cauldron of hot oil on the first day of his new job as nonexecutive chairman of oil and gas company SacOil. That is because the majority of SacOil’s board resigned on Friday at a meeting at which shareholders voted against a board resolution to convert a loan to equity.
Application has been made for the suspension of SacOil’s listings on the Johannesburg Stock Exchange (JSE) and the London Stock Exchange.
The effective date of the appointment of Mr Mboweni, who is also nonexecutive chairman of AngloGold Ashanti, nonexecutive chairman of Nampak, and an internal adviser to Goldman Sachs International, was June 1.
SacOil said in a statement on Friday that CEO Robin Vela and nonexecutive directors John Bentley and Bill Guest had resigned “with immediate effect.”
The three directors, representing a majority of the company’s board, resigned because they had believed that the conversion of $17.4m of Gairloch Limited loans to equity at 32c per SacOil share, was in the best interests of the company. However, shareholders did not agree.
SacOil was untraded at 27c per share on the JSE on Friday. Directors could not be reached for further comment yesterday.
SacOil late on Friday announced the appointment of two new nonexecutive directors, Mzuvukile Maqetuka, a former director-general of SA’s National Intelligence Agency, and Stephanus Muller, a nonexecutive director of Amalgamated Appliances and of Kap Industrial Holdings. SacOil had initially entered into a number of loan agreements with financier Rencap, but the loans raised from Rencap were novated to Gairloch.
The directors believed that the loan conversion would have made SacOil debt free with a better ability to raise funds for investment in its projects. The deal would have left Gairloch with a 33.89% interest in SacOil.
Gairloch is a private company with interests in infrastructure and manufacturing in Nigeria.
Gairloch also has a 25% interest in Energy Equity resources, a London-based company focused on acquiring and developing oil and gas assets in West Africa, particularly Nigeria.
SacOil’s directors had believed that the introduction of Gairloch into SacOil as a shareholder would have provided SacOil with greater alignment with its Nigerian joint venture partner, and also position SacOil to better grow its Nigerian business. By 2020, Africa is expected to be the world’s thirdbiggest oil region