Thebe's investment in Shell 'no freebie' says CIO
Thebe Investments clarifies the situation regarding rumours of a dispute between them (Thebe Investment) and the Shell Corporation.
A Shell service station in Cape Town. Picture: Facebook/Shell Marchios Service Station
Aubrey Masango is joined by Rapulane Mabelane, Chief Investment Officer at Thebe Investment Corporation.
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There was widespread surprise earlier this month when Shell announced it would be leaving South Africa.
"Shell has decided to reshape the downstream portfolio and intends to divest our shareholding in Shell Downstream South Africa (SDSA)," read a statement by the company.
The move marks the end of the multinational oil and gas company's 120-year presence in South Africa where it operates more than 500 service stations.
The decision has been linked to a dispute with its BBB-EE partner, Thebe Investment Corporation, over the value of Thebe's 28% investment in Shell Downstream Africa.
Its chief investment officer Rapulane Mabelane says Thebe scored a 'warehouse' price for its share in Shell is false.
"Thebe paid full market value for its investment in Shell. No discount...the investment by Thebe into Shell was not a freebie."
Rapulane Mabelane, Chief Investment Officer - Thebe Investment Corporation
"We paid fair value, utilising a combination of cash, debt funding and a business which we operated."
Rapulane Mabelane, Chief Investment Officer - Thebe Investment Corporation
Mabelane explains that in 2015, Shell approached Thebe to request that the two form an integrated business encompassing the refining arm and marketing arms.
"We agreed to that. We called it Shell Downstream Africa."
Rapulane Mabelane, Chief Investment Officer - Thebe Investment Corporation
The move boosted Thebe's stake in Shell from 25% to 28% and value was ascribed to that.
Mabelane says an exit mechanism was provided to Thebe.
"That enables us, at a point in time, to go to Shell and say to our co-shareholder, we have come...to a decision to exit and therefore we are putting our shares back to you, there is formula prescribed in the shareholder's agreement of how, at that stage, the 'put value' can be determined."
Rapulane Mabelane, Chief Investment Officer - Thebe Investment Corporation
In an interview with Business Report on Friday, Thebe board member Dr Molefe Tsele said the company had been reviewing its investment in Shell since 2020 and it had made its put option in August 2022.
Shell has declined to comment on speculation regarding the disagreement with Thebe saying in a statement:
"As a matter of policy and principle, Shell Downstream SA distances itself from speculation or rumours, particularly in relation to confidential shareholder agreements and relationships."
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