New(ish)look Sasol on the way
Indebted and belching greenhouse gases, Sasol needs to change. Version 2.0 appears a step in the right direction
ý A makeover is not just a gripping TV trope for insecure teenagers, walking fashion disasters and anyone with a beige spare room.
As it turns out, it can fire up weary investors too.
After all, who can resist watching to the very end as the introverted high school recluse with spectacles and a bad perm becomes a sleek glamazon with contact lenses and some flash new clothes?
Founded in 1950 and listed on the JSE since 1979, Sasol has run the gamut from investor sweetheart to social reject.
And yet, it’s always had potential.
Enter Sasol 2.0, as the chemicals and synthetic fuels giant likes to call it. It’s a newishlook Sasol of the future — profitable in a low oil price environment, sustainable (read green) and, perhaps one day, two separately listed companies, not one.
Even before Covid-19, Sasol had taken a large hit to its share price after delays and ballooning costs at its Lake Charles Chemicals Project in Louisiana.
Then Covid struck and Sasol’s share price sank to new lows.
Despite a vigorous recovery since March, Sasol’s net debt of R143.5bn still towers over its market value (about R90bn), but it has had little room to manoeuvre in its promise to cut $2bn in costs and raise at least another $2bn in asset sales.
It’s all in a bid to reduce or even void a $2bn equity raise from its long-suffering shareholders.
Apart from its woes in the US and its enormous debt, the company has come under significant pressure on the climate front of late as SA’S second-largest emitter of greenhouse gas. So what does this new-look Sasol entail?
In a nutshell, a business based on two core units — chemicals and energy, employing far fewer people.
In an update to the market last week, Sasol said the energy business will comprise the Southern African value chain and associated
Source: Infront