Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 95
Raising capital overseas. A listing by a South
African company on any stock exchange requires prior
approval by the FSD.
Day-to-day interaction with the FSD on
exchange control matters is facilitated through
Authorised Dealers who are persons authorised by
National Treasury to deal in foreign exchange, in so far
as transactions in respect of foreign exchange are
concerned.
Under South African exchange control
regulations, we must obtain approval from the FSD
regarding any capital raising activity involving a
currency other than the rand. In granting its approval,
the FSD may impose conditions on our use of the
proceeds of the capital raising activity outside South
Africa, including limits on our ability to retain the
proceeds of this capital raising activity outside South
Africa or a requirement that we seek further approval
by the FSD prior to applying any of these funds to any
specific use. Any limitations imposed by the FSD on
our use of the proceeds of a capital raising activity
could adversely affect our flexibility in financing our
investments.
The South African government has from time
to time stated its intention to relax South Africa’s
exchange control regulations when economic
conditions permit such action. In recent years, the
government has incrementally relaxed aspects of
exchange control.
The following is a general outline of South
African exchange controls. The comments below relate
to exchange controls in force at the date of this annual
report. These controls are subject to change at any time
without notice. Investors should consult a professional
advisor as to the exchange control implications of their
particular investments.
Foreign investments. Under current exchange
control regulations, we, and our South African
subsidiaries, require approval, either by Authorised
Dealers of the FSD to invest offshore.
Foreign financing and investments
Although there is no limitation placed on us
with regard to the amount of funds that we can transfer
from South Africa for an approved foreign investment,
the FSD may, however, request us to stagger the capital
outflows relating to large foreign investments in order
to limit the impact of such outflows on the South
African economy and the foreign exchange market.
Foreign debt. We, and our South African
subsidiaries, require approval by the FSD to obtain
foreign loans.
Funds raised outside the CMA by our
non-resident subsidiaries, i.e. a non-resident for
exchange control purposes, are not restricted under
South African exchange control regulations and may be
used for any purpose including foreign investment, as
long as such use is without recourse to South Africa.
We, and our South African subsidiaries, would,
however, require approval by the FSD in order to
provide guarantees for the obligations of any of our
subsidiaries with regard to funds obtained from
non-residents of the CMA.
The FSD also requires us to provide it with an
annual report, which will include the results, of all our
foreign subsidiaries.
Investment in South African companies
Inward investment. As a general rule, a foreign
investor may invest freely in shares in a South African
company. Foreign investors may also sell shares in a
South African company and transfer the proceeds out of
South Africa without restriction. Acquisitions of shares
or assets of South African companies by non-South
African purchasers are not generally subject to review
by the FSD when the consideration is in cash, but may
require review by the FSD in certain circumstances,
including when the consideration is equity in a
non-South African company or when the acquisition is
financed by a loan from a South African lender.
Debt raised outside the CMA by our
non-resident subsidiaries must be repaid or serviced by
those foreign subsidiaries. Without approval by the
FSD, we can neither use cash we earn in South Africa
to repay or service such foreign debts nor can we
provide security on behalf of our non-resident
subsidiaries.
We may retain dividends declared by our
foreign subsidiaries offshore which we may use for any
purpose, without any recourse to South Africa. These
funds may, subject to certain conditions, also be
invested back into the CMA in the form of equity
investments or loans.
Dividends. There are no exchange control
restrictions on the remittance of dividends declared out
of trading profits to non-residents of the CMA.
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