Slowly but surely Sasol is walking a path back to fiscal sustainability. One day it may just regain its blue-chip status.
In line with its strategy to reduce debt, Sasol is to sell its sodium cyanide business to a locally owned subsidiary of Czech-based Draslovka Holding, which specialises in cyanide production.
The business was sold following an open tender process, for R1.46-billion. This will be used to reduce Sasol’s debt, which is hovering at about R137-billion.
Sodium cyanide is a highly toxic chemical used to leach gold and other metals from ore bodies and Sasol has a commanding position in this market.
The firm has been flogging the family silver since finding itself in an unenviable position in 2020 as the oil price collapse and volatility in chemical prices combined with the spread of Covid-19 put the extremely stretched balance sheet under pressure. Facing a liquidity crisis and breach of its debt covenants, management implemented a strategy to conserve at least $6-billion by 2021 through self-help measures and accelerated asset disposals.
In the past few months Sasol has sold several assets, notes Asief Mohamed, chief investment officer at Aeon Investment Management. While asset sales have delivered about R46-billion of proceeds,…
Source link : https://allafrica.com/stories/202107130608.html
Author : Daily Maverick
Publish date : 2021-07-13 11:13:53