- Write by:
-
Wednesday, December 2, 2020 - 10:27:21 PM
-
731 Visit
-
Print
Mining News Pro - Debt-laden chemicals and energy group Sasol is keeping its rights-issue powder dry, indicating on Wednesday that a final decision on any possible issuance, including its scale, will depend on various factors, including whether or not it is successful in completing yet more asset disposals.
CEO Fleetwood Grobler reported on Wednesday that a “go or no-go” decision on the rights issue would be announced in February, when the group was scheduled to release its interim results for the 2021 financial year.
The JSE-listed firm is aiming to reduce its $10-billion debt burden by $6-billion by the end of its 2021 financial year and has identified a rights issue, which would be capped at a maximum level of $2-billion, as one of the possible funding sources to achieve that goal.
The other two sources include “self-help” measures to save $2-billion, with the first $1-billion in savings achieved during the 2020 financial year, and divestments of higher than $3.5-billion.
CFO Paul Victor reported during a virtual meeting with shareholders on Wednesday that it had already “banked” $3-billion in asset disposals, with $2-billion of that having been secured through the sale of 50% of its base chemicals business at the Lake Charles Chemicals Complex, in the US, to LyondellBasell.
The deal with LyondellBasell was consummated on December 1, resulting in the formation of the Louisiana Integrated Polyethylene JV.
Victor indicated that the decision to proceed with a rights issue during the 2021 calendar year would hinge largely on whether Sasol could increase the value of its asset disposals to about $3.8-billion, as well as whether market conditions remained either constant at current levels, or had improved by February.
He said that he was fully aware of the “overhang” that the uncertainty was creating for Sasol’s share price, but argued that it would be “premature” to remove the rights issue as an option in light of ongoing market volatility.
“Further disposals of $800-million to $1-billion can make a shift in terms of the ticket size of any rights issue.
“So, if we have a high probability of achieving our $3.8-billion asset-disposal target, or at least a significant part thereof, it will contribute significantly in reducing that ticket size, or may even remove the need for a rights issue,” Victor explained during a webinar convened to unveil the ‘Sasol 2.0’ transformation programme, which aims to reposition the group for future financial and environmental sustainability.
He added that, in February, Sasol would also need to assess its debt-covenant headroom, given that the leniency shown hitherto by its bankers in allowing it to breach covenant levels was likely to become increasingly difficult to sustain.
Grobler said the objective of the Sasol 2.0 programme was to move beyond the deleveraging of the balance sheet so as to “reset” the group to be competitive at an oil price of $45/bl and to begin repositioning ‘Future Sasol’ for a low-carbon environment.
Although its capital expenditure outlook for the period to 2025 had been reduced materially to between R20-billion and R25-billion, the figure included scope to further reduce its greenhouse-gas (GHG) emissions and to begin preparing the ground for a reduction of at least 10% in emissions by 2030.
Sasol, he said, would unveil a “significant GHG reduction” in its 2050 roadmap, which would be released at its Capital Markets Day, to be held in mid-2021.
Short Link:
https://www.miningnews.ir/En/News/609573
![Sasol, IDC team up to stimulate South Africa’s green-hydrogen industry](/Incsys/Photo.aspx?image=/Uploads/News/20210706125329666.jpeg&width=236&height=180)
Mining News Pro - Sasol and the State-owned Industrial Development Corporation (IDC) have signed a memorandum of ...
![Sasol moves to sell big stake in Rompco pipeline to a Reatile-led consortium](/Incsys/Photo.aspx?image=/Uploads/News/20210514140136346.jpeg&width=236&height=180)
Mining News Pro - Energy and chemicals group Sasol confirmed on Friday that it had entered into a R5-billion agreement ...
![Sasol and Air Liquide initiate first phase of 900 MW renewables procurement process](/Incsys/Photo.aspx?image=/Uploads/News/20210413133049090.jpeg&width=236&height=180)
Mining News Pro - Sasol and Air Liquide have formally announced plans to jointly procure 900 MW of renewable-energy ...
![Eskom, Sasol face government ultimatum to meet emission limits](/Incsys/Photo.aspx?image=/Uploads/News/20210310144404147.jpg&width=236&height=180)
Mining News Pro - Eskom Holdings and Sasol, South Africa’s two biggest polluters, must comply with emission limits even ...
![Sasol abandons rights issue as it secures $3.3bn from asset disposals](/Incsys/Photo.aspx?image=/Uploads/News/20210222123219852.jpg&width=236&height=180)
Mining News Pro - Chemicals and energy group Sasol confirmed on Monday that it would no longer pursue a rights issue in ...
![Eskom, Sasol rebuffed, Creecy says as she fights pollution suit](/Incsys/Photo.aspx?image=/Uploads/News/20210202134657320.jpg&width=236&height=180)
Mining News Pro - Environmental Affairs Minister Barbara Creec said she rejected pleas for leniency from senior ...
![Divestment of Sasol`s interest in Gemini JV finalised](/Incsys/Photo.aspx?image=/Uploads/News/20210104132818636.jpg&width=236&height=180)
Mining News Pro - Sasol says the divestment of its 50% interest in the Gemini high-density polyethylene (HDPE) joint ...
![Sasol sells 50% of Lake Charles base chemicals unit to LyondellBasell for $2bn](/Incsys/Photo.aspx?image=/Uploads/News/20201002135720719.jpg&width=236&height=180)
Mining News Pro - Debt-laden chemicals and energy group Sasol has announced a $2-billion joint venture (JV) agreement ...
![South Africa’s green revolution gathering momentum](/Incsys/Photo.aspx?image=/Uploads/News/20200902142713212.jpg&width=236&height=180)
Mining News Pro - The Covid-19 pandemic has presented countries around the world with immense challenges, as the impact ...
No comments have been posted yet ...