<article><p class="lead">Switzerland-based trading firm Glencore's black economic empowerment (BEE) partner has concluded its acquisition of a majority shareholding in Chevron's downstream assets in South Africa for $973mn.</p><p>Off The Shelf Investments 56 (OTS) today announced it has acquired another 75pc stake Chevron's downstream operations in South Africa. OTS now owns a 98pc stake, with the remaining 2pc held by employees. It also has full ownership of the firm's entire downstream business in neighbouring Botswana. </p><p>Chevron's assets in South Africa include a 100,000 b/d Cape Town refinery, a lubricants plant in Durban and around 850 retail stations and storage facilities. As part of the deal, OTS has undertaken to invest 6bn rand ($500mn) over five years to develop the Cape Town refinery and expand South Africa's refinery capacity.</p><p>OTS has held a 23pc stake Chevron's downstream operations for 15 years. As a minority shareholders' group, OTS had "a first right of refusal" to acquire Chevron's assets, which enabled it to beat a rival $900mn bid from China's Sinopec for the same assets.</p><p>Parties signed all the relevant transaction agreements yesterday in London, thereby giving immediate effect to the change in ownership. The company's name will change to Astron Energy.</p><p>"Chevron South Africa will retain the right to use the Caltex [service station] brand for a period of up to six years," OTS chairman Mashudu Ramano said.</p><p>Glencore is providing the necessary funding for OTS to exercise its pre-emptive right and to facilitate the proposed acquisition. Under the original terms of the agreement, Glencore was to acquire OTS's 75pc stake in Chevron South Africa and full ownership of Chevron Botswana.</p><p>But Ramano told <i>Argus </i>that OTS fully intended to exercise its option to repay the Glencore funding and retain its shareholding. "Glencore has the option to take the shares and we have the option to buy the shares. If we can fund it, we can buy those shares," Ramano said.</p><p>But he would not divulge if there was a deadline for OTS to exercise its option or pay back Glencore's loan. "We can pay it back anytime … from now," Ramano said. "The sooner I do it the better." "Normally there are deadlines, but this is a very unique transaction. I am very grateful for the relationship we have with Glencore," he added.</p><p>He said that he sees significant expansion opportunities for the new entity, both within South Africa and across the country's borders. A new, black chief executive officer will be announced next week, he said.</p></article>