The South Australian Government today announced its intention to repeal the legislation which restricts any one shareholder from having an entitlement to more than 15% of Santos’ shares.
In welcoming the decision, Santos’ Chairman, Mr Stephen Gerlach, said the shareholder cap was no longer relevant, and its removal would mark an exciting new era for Santos as it pursued its many growth initiatives.
“Santos has changed dramatically since it was founded in 1954 – from a small explorer in the Australian outback to an international oil and gas producer,” Mr Gerlach said.
“We have long argued that removal of the shareholder cap is in the best interests of Santos and its shareholders.”
“In arriving at its decision to remove the shareholder cap, the South Australian Government sought assurances it believed were important to protect the State’s interests.”
“The Santos board has carefully assessed the benefits to the Company and its shareholders arising from the removal of the shareholder cap, and the implication of the commitments sought from the State, and is satisfied that the final agreement it has reached with the State is in the best interests of shareholders.”
The Government’s decision is subject to Parliamentary review and approval, followed by a transition period of 12 months before the shareholder cap would cease to have effect.
Santos’ Managing Director, Mr John Ellice-Flint, said removal of the shareholder cap will enable Santos to continue to pursue its strategy of becoming a leading Australian-based, Asian-focussed energy company.
“This decision represents the removal of an artificial brake on Santos’ growth that has been in place for almost three decades” Mr Ellice-Flint said.
“Santos will now be able to maximise its efficiency in accessing capital markets and pursue the opportunities created by the growing demand for energy in Asia on a level playing field with other listed companies operating in the region.”
Undertakings provided by Santos include legally binding assurances to maintain a strong corporate presence in South Australia (which currently equates to 100% of roles directly associated with Santos’ SA Operations and approximately 90% of the Company’s SA based work force) and to commit significant funding (a pledge of $60 million) to community programs and sponsorships.
In the unlikely event that these undertakings are breached, Santos will be required to pay a maximum of up to $100 million in compensation to the State.
A copy of the Government’s statement is attached to the PDF file available from the link below.