Sun, 24 Jan 2021

Restructuring Sasol sells stake in Nigerian plant

02 Jul 2020, 04:11 GMT+10

Sasol has agreed to sell its indirect interest in the Escravos GTL plant in Nigeria to Chevron, it said in a JSE-note to shareholders on Wednesday.

Sasol will continue to support Chevron in the performance of the plant.

Weaker oil prices and the global impact of Covid-19 on demand have negatively impacted Sasol, as well as its share price. Sasol has also been under pressure due to financing problems regarding its Lake Charles Chemicals Project in the US. Sasol has a $10 billion debt burden.

Sasol plans to raise $2 billion through a rights issue, which would be the country's largest capital raise in decades, to help alleviate pressure on its balance sheet. As part of its restructuring plans, the company is considering the sale of its interest in a pipeline and a gas fired power plant in Mozambique and is also in partnership talks to introduce a partner to its base chemicals business in the US, it said.

Shares in Sasol, which are normally correlated with the price of international oil, have plunged some 57% this year compared to a JSE All Share that is down just under 20%.

Outside of the asset sales, Sasol said it had formed a new explosives partnership with Enaex S.A, by selling its 51% stake in the business.

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