ISSUE 242 - FREE
27
SEPTEMBER 2019
COMMUNITY NEWS. ORIGINAL - ACCURATE - FIRST
017 631 1903 / 017 631 1845 • admin@thebulletin.co.za • 1 Kiewiet Street, Secunda (Lake Umuzi)
Sasol selling Mining?
B
loomberg news led with a breaking story on Sasol selling its coal-mining business. The information was obtained from several unknown sources, but was not confirmed nor denied by Sasol at that time. “We do not wish to comment at this stage on which assets have been earmarked for divestment, since they form a part of a disciplined and confidential M&A process,” it said. “Sasol will update the market as and when appropriate regarding progress on the asset review process.” Bloomberg reported as Sasol’s response. The following are excerpts from the initial Bloomberg report: “The company will begin a formal sales process in the coming weeks, said the people, who asked not to be identified as the information isn’t public yet. The mining business had a turnover of R20bn in the 2018 financial year, according to the company’s financial report, mostly from internal sales to Sasol’s other operations. The company would plan to sign a coalpurchase agreement with whoever buys the asset said one of the people Sasol announced a long-term review process in November 2017 that would involve disposing of some assets at prices that ensure value for the company, it said in an emailed response to questions, while declining to comment directly on a possible mine sale. The mine sale plan comes as Sasol grapples with cost overruns and delays at its giant US chemicals project. Selling its coal mines may also help Sasol reduce its environmental liabilities at a time when more investors are focusing on how businesses affect climate change. The Lake Charles chemical plant in Louisiana, which is starting up this year, will transform Sasol’s production mix to focus on chemicals. Yet the company has lurched from one setback to the
next, with the project now estimated to cost as much as $12.9bn, about 50% more than initially planned. Sasol’s shares have tumbled 48% in the past 12 months. Besides the cost overruns and start-up delays, the company has also twice postponed its annual financial results while it completes an investigation into what went wrong at Lake Charles.” Several other mainstream publications picked up on the article and reported on it in their publications. The Bulletin contacted Sasol for an official response to the allegations. Alex Anderson, Senior Manager, Group External Communication, Sasol Limited responded with the following Statement: “As part of our long term, value-based strategy announced in November 2017, we confirmed that we had commenced an asset review process to ensure that all assets in our global portfolio deliver against our strategy. This process forms a key part of the asset portfolio optimisation programme. In May this year, we confirmed that we are targeting the disposal of assets which have an aggregate net asset value exceeding US$2 billion. To be clear, these are actions that we are taking by choice. We will proceed only if there is value for Sasol and we will not sell assets at sub-optimal prices. By taking these carefully considered actions, it will support reducing our debt, while optimising our asset portfolio. With this context in mind, since 2017 Sasol has completed several reviews resulting in a number of assets from South Africa and around the world identified for potential divestment. These reviews have resulted in Sasol successfully concluding a number of divestments, totalling over US$200 million, which include our assets in: - Malaysia (chemicals joint venture); - Heat transfer fluids in Germany; and - Lake Desmet in USA (coal reserve). On Monday, 22 July we announced
Aart Reedijk lost his fight On Sunday afternoon just after 15H00 Aart Reedijk lost his fight against the illness that has been plaguing him for the past year. Aart has been a pillar for The Bulletin. He was one of the founding members and enjoyed the newspaper tremendously. He excelled in writing articles and was a keen photographer. After a brief period away from The Bulletin, Encee van Huyssteen, the editor, asked Aart to help with proofreading. He was also tasked with writing stories on a weekly basis. Aart would be remembered as a man
that we had selected Enaex S.A., a subsidiary of the Sigdo Koppers Group, as Sasol Explosives’ preferred partner to engage with for the possible formation of a joint venture that would potentially see Enaex S.A. take full operational control of Sasol Explosives. As this is an early engagement, no final decision has been taken and further communication will be provided at the appropriate time. On Friday, 26 July Sasol and Huntsman Corporation signed a definitive agreement for Sasol to dispose of our 50% equity interest in the Sasol-Huntsman maleic anhydride joint venture. Our asset review process is extensive and extends across a number of assets in the entire portfolio. The review process is underway but has not been concluded. The outcome of this feasibility process will determine the viability of a divestment, if at all, for a final decision to be made at the appropriate time. We do not wish to comment at this stage on which assets have been earmarked for divestment, since they form a part of a disciplined and confidential M&A process. Sasol will update the market as and when appropriate regarding progress on the asset review process.” Sasol has been under pressure lately with less than favourable results with the Lake Charles project where the costs have spiralled to nearly out of control. Fin24 reported that:“Sasol will again be delaying the publication of its financial results for the year ended June 30 after
who took pride in whatever he did and he paid meticulous attention to detail. He was also someone that had a soft spot for children. He took a keen interest in Janelle Huis and Laerskool Trichardt. When the opportunity arose to help the homeless he did not hesitate to motivate the idea to his fellow SANMWA members. His family and The Bulletin would like to thank Shayne from Langamed and the personnel from Mavcorp for their support in transporting Aart to hospital on Saturday night. Thank you Aart for your contribution in making The Bulletin the success it is today. Thank you for your profound impression that you have left on so many people. One day we will meet again.
its board asked for additional time to investigate cost changes at its Lake Charles Chemicals Project in the US. The SA-headquartered petrochemical group was set to release its earnings report on August 19. This was then delayed until September 19 for the probe to start. In an update to shareholders on Friday, Sasol said it now hopes to release the results by no later than October 31 after its board agreed to “commission additional work”. The group’s shares fell 3.5% by 10:45 on the JSE.” Bloomberg reported on 30 August that: “Sasol has been asked by some of the country’s biggest fund managers to consider executive changes including ousting Stephen Cornell, one of two chief executive officers, over cost overruns at a flagship project, according to people familiar with the matter. Sasol is under pressure to curb air pollution. “South Africa’s air is absolutely filthy,” said Melita Steele, a senior climate and energy campaign manager at Greenpeace Africa. “We simply cannot afford to waste any more time by delaying industry compliance with air-quality legislation or the transition to renewable energy.” Sasol has, however, repeatedly committed themselves to the safety of its workers as well as to the environment. Sasol recently embarked on a program to replace coal fired stoves with gas. The coal fired stoves are one of the major polluters in the area. - Encee van Huyssteen