Green light for merger in SA’s solar power sector
The Competition Tribunal has conditionally approved the proposed large merger whereby Atlantica Sustainable Infrastructure intends to acquire the employees of Abengoa South Africa and the assets of solar company Kaxu CSP.
In a statement, the Tribunal says the transaction is approved subject to broad-based black economic empowerment (B-BBEE) ownership-related conditions.
The primary acquiring firm is Atlantica South Africa Operations, an indirect subsidiary of Atlantica.
Atlantica conducts activities in South Africa through Kaxu Solar One. Through this subsidiary, it has a 100 MW solar parabolic facility in Pofadder, in the Northern Cape, known as the Kaxu Facility.
Kaxu Solar One has an agreement with Kaxu whereby Kaxu provides operations and maintenance services to the Kaxu Facility.
The Tribunal notes that Kaxu does not have any employees and has an agreement with Abengoa to provide the labour for its services.
It adds that Atlantica does not have any employees at the Kaxu Facility. Through Kaxu, the Tribunal notes that it has acquired the services of employees of Abengoa SA.
The merger involves the transfer of a number of Abengoa employees to Atlantica South Africa Operations. The employees will retain their jobs and the merger will, therefore, have a positive impact on employment, says the Competition Tribunal.
Post-merger, it notes that the shareholders of Atlantica South Africa Operations, will be Atlantica South Africa (which is not owned or controlled by historically disadvantaged persons); and yet-to-be established B-BBEE partners (which is intended to hold 8% of the shares in Atlantica South Africa Operations).
The Tribunal points out that in order to give effect to this, the merger is approved subject to, among others, the following ownership-related conditions:
- Atlantica South Africa Operations must implement a B-BBEE ownership transaction within a certain time frame. It must ensure that a minimum of 8% of its issued share capital is held by Black Persons / People who are also employees of Atlantica South Africa Operations; and
Atlantica South Africa Operations shall have full latitude to design appropriate transaction/s to give effect to the above, it being agreed that the B-BBEE ownership transaction shall include at least an employee participation element.
“The design and implementation of the B-BBEE ownership transaction will be at the cost of Atlantica South Africa Operations. This includes the issue of the requisite shares to the persons or entity which Atlantica South Africa Operations selects in order to comply with the conditions,” it concludes.