PUMA Botswana deal hits snag
The pullout of BP-Shell’s operations in Southern Africa is proving to be complicated as wrangles continue to emerge over the acquisition of some of the oil marketing company’s assets.
PUMA Energy – the Trafigura subsidiary that bought BP assets in Botswana, Namibia and Tanzania, Zambia and Malawi – is embroiled in a legal wrangle with a Botswana company.
The case was lodged at the High Court by Tati Motors (Pty) Ltd in Lobatse in November 2010 with the plaintiff seeking cancellation of agreements and eviction of BP Botswana from their property due to allegedly unpaid rentals. BP sold its Botswana business to PUMA Energy in December 2010. Sources say there are concerns pertaining to the BP-Puma transaction, which is significantly different from that of the Shell-Vivo deal where Shell retained a shareholding of 20 percent and Vivo in turn offered new contracts to local owners of Shell filling stations.
PUMA is unwilling to mitigate the risk factor of brand changes.
PUMA Energy has also had legal problems in its takeover of BP business in Zambia. In that country, PUMA is fighting a court judgment directing it to purchase 3.8 million shares from Reynolds Bowa, a minority shareholder of BP on the Zambia Stock Exchange.
Since BP Zambia Plc was a publicly-owned company and listed on the Lusaka Stock Exchange, the takeover of the 75 percent shareholding by PUMA triggered a mandatory offer to purchase the 25 percent shares from the minority shareholder. However, PUMA declined to make the mandatory offer, opting to maintain 75 percent ownership of the assets.
The fuel retail market in Botswana is dominated by Shell/Vivo Energy, Engen, Total, Caltex and new entrant PUMA Energy.
The industry is characterised by a few dealers operating more than one site – and in some cases more than 10 sites. In Zimbabwe, the acquisition of BP-Shell assets by Investment firm Masawara was also largely disputed with former local BP and Shell employees last year applying to the High Court for the cancellation of the deal.
The former employees argued that the continuance of the transaction was in violation of the country’s empowerment laws. However, that legal challenge may well be dead in the water as Zimbabwe’s Youth Development, Indigenisation and Empowerment Ministry indicated that Masawara had indeed complied with the law.