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Here are Sasol's plans for drastic steps after dramatic value destruction

17 March 2020 6:57 PM
Tags:
SASOL
Novel Coronavirus
COVID-19
petroleum

Sasol is planning to hit back after a massive fall in value.

Sasol is planning to take drastic steps after dramatic value destruction, the post-coronavirus share slump, and US project problems.

Literally adding fuel to the fire was the collapse of the oil price driven by a price war between Saudi Arabia and Russia driving the price to below 30 dollars a barrel.

Its share price is down 85 per cent this year.

Fleetwood Grobler, CEO of Sasol, is on the line to Bruce Whitfield, about raising capital.

Just two weeks ago we were busy with our roadshow and giving investors a sense of where we are. We were still living in a world where the oil price was between 50 and 60 dollars. By the middle of the week we realised there's no traction. Friday that week Opec met and there was quite a concerted effort for them to get alignment. We saw the demand shock of coronavirus coming through that weekend. The Monday When Opec announced they did not have not alignment - the oil price came down in the low thirties. That happened in about a week.

Fleetwood Grobler, CEO - Sasol

We've taken decisive action. We have announced today a comprehensive programme how to fundamentally reposition the company over the next 24 months in a lower priced environment. We put measures in place to navigate this period. There were always plans in terms of the 50 to 60 dollar oil price environment which we could navigate - I think what really broke the camel's back is the crisis with respect to corona and the oversupply of oil because of Opec.

Fleetwood Grobler, CEO - Sasol

I think we indicated that we've got first the liquidity angle. First of all we believe we can maintain liquidity headroom in excess of one billion USD over the next 12 to 18 months, with a 25 dollar barrel oil price before the benefits of hedging. If nothing else happens, if we don't apply any other measures we can still run an underlying business in a very low oil price environment. But that's not good enough- we need to get out of debt - we need to address that - and that's the measures we put in place. We want to get at least six billion USD and we have ways of doing that.

Fleetwood Grobler, CEO - Sasol

Listen to the entire interview about the measures Sasol is stacking up, below.

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning.


17 March 2020 6:57 PM
Tags:
SASOL
Novel Coronavirus
COVID-19
petroleum

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