Johannesburg – Sasol has taken its $2-billion (R29.36bn) rights issue off the table after cash conservation efforts coupled the asset divestments paid off helping the group to reduce its debt burden as it reported improved earnings during the six months to end December.
Sasol said yesterday that it had decided not to pursue a rights issue, given the current macroeconomic outlook, and the significant progress made on its response plan initiatives.
Chief financial officer Paul Victor said Sasol had turned the corner and did not need to go to shareholders as it had delivered on its plans to strengthen the balance ahead of schedule.
“The balance sheet debt is getting to a decent place, we are profitable at an oil price of below $45 a barrel, that does not need shareholders to step in and help us. We are in a pretty good position. We have turned the corner,” said Victor.
Despite being impacted by a 23% decrease in the average rand per barrel price of Brent crude oil coupled with softer demand due to Covid-19 lockdowns and the US Gulf Coast Hurricanes earnings increased more than 100% to R15.3-billion from R4.5-billion in the prior period following non-cash adjustments.