Johannesburg – Sasol’s financial position was stronger compared to earlier in the year when it announced a plan to raise $2-billion (about R30.66-billion) through a rights issue as part of measures to address debt, the JSE-listed petrochemical company said yesterday.
Chief financial officer Paul Victor said the market would be informed in February whether or not the rights issue would proceed and if so how large it would be.
“The rights issue is an important factor we must consider in creating a sustainable capital structure. We are aware of the intense scrutiny of this matter,” said Victor, adding that the rights issue would be a final step.
“There is no doubt that we have put ourselves in a much stronger position than earlier in the year. As we said by the end of this financial year we want our balance sheet to be back in a sustainable position,” said Victor.
The business performance, the Sasol 2.0 transformation project, macroeconomic volatility, and the asset disposal progress would be considered before a decision was made on the right issue.
Sasol, whose share price has taken a knock due to the slump in the oil price, told investors that it was resilient at an oil price of $45 a barrel. The group plans to deliver $3.5-billion from asset disposals and reduce capex by R20-billion to R25-billion a year as part of the Sasol 2.0 project.
Victor told investors that Sasol’s run rate needed to be maintained, and the company was comfortable with the run rate that it had achieved thus far despite the challenges.