PIC may join bid to acquire Chevron SA
THE Public Investment Corporation (PIC) could emerge as a 50% partner alongside Glencore in a joint bid for Chevron SA’s $900-million worth of assets, which include a refinery and a network of 800 Caltex service stations in two countries.
While a bid by Chinese energy giant Sinopec for Chevron SA has already been approved by the competition authorities, Glencore and the PIC are to exercise a preemptive right held by Chevron’s empowerment partner, Off the Shelf, headed by Mashudu Ramano.
The PIC, which manages almost R2trillion of the government pension and other funds, is a large empowerment player in the economy with a mandate that includes a commitment to economic transformation.
The refinery is a 100 000-barrel-a-day plant in Cape Town and the petrol stations are located in SA and Botswana.
In response to questions the PIC said on Monday that it had not made an investment decision on the transaction, but did not confirm or deny that it was looking into it. In 2017 Chevron SA agreed to sell its 75% holding to Sinopec for $900-million (about R11-billion) and was announced as a preferred bidder.
The remainder of Chevron SA is owned by a consortium of black economic empowerment (BEE) shareholders and an employee trust.
Economic Development Minister Ebrahim Patel extracted a number of public interest commitments out of Sinopec to approve the deal, including a R6-billion capital investment. It is not known whether Patel will be able to extract the same conditions from the new bidders for the deal to go ahead.
Business Day understands that the PIC’s involvement is dependent on it securing approval from the Government Employees Pension Fund, the PIC’s biggest client, a board seat and a minimum five-year lock-in period for Glencore, among other conditions.
Chevron said as a matter of policy the group did not comment on commercial matters. Sinopec did not reply to questions seeking comment.
A Glencore spokeswoman declined to comment and Off the Shelf was not available for comment.