Sasol CFO Paul Victor
Photo by: Creamer Media's Donna Slater
Chemicals and energy group Sasol has dismissed reports that it plans to sell its fuel retail business as part of an ongoing asset disposal process, while the State-owned Central Energy Fund (CEF) has described as “malicious” reports that it is in talks to acquire Sasol’s petrol stations.
Sasol CFO Paul Victor reiterated that the cash-strapped group was in the process of reviewing opportunities to divest from noncore assets but said in a statement that it remained committed to a strategy of growing its fuel retail presence in South Africa.
The asset-disposal programme was initiated as part of broader efforts to reduce Sasol’s $10-billion debt burden by $6-billion by the end of its 2021 financial year.
The JSE-listed group is aiming to realise at least $2-billion from the disposal programme, but is also considering a $2-billion rights issue to help it navigate its current financial predicament, which has been exacerbated by the slump in energy prices associated with the Covid-19 pandemic.
Sasol has been coy in disclosing which assets are for sale, but confirmed in March that discussions were under way regarding a joint venture partner taking up to 50% of Sasol’s US base chemicals assets, which included assets at the troubled Lake Charles Chemicals Project.
Victor said Sasol’s focus for the retail network was on improving margins, which implied both increasing its retail site development and conversion of sites to the Sasol brand, as well as possible small-scale acquisitions.
Sasol’s 410 fuel retail and convenience centres currently account for 11% of the regulated retail market in South Africa.
“Although we are regularly approached by interested parties to acquire or partner with us in the retail network space, we are not in discussions with any such parties to divest or partner in our downstream fuel retail business,” Victor said.
Likewise, CEF chairperson Dr Monde Mnyande dismissed as “sensational reporting” a suggestion that the group was negotiating to buy Sasol’s petrol stations.
The reports arose after Mnyande told members of the Parliamentary Portfolio Committee for Mineral Resources and Energy on May 12 that the group could consider acquiring some of Sasol’s assets in line with a strategy to drive direct investment in South Africa’s energy value chain.
He added that, while part of the campaign will be to take advantage of all available energy assets that are up for sale, at no stage did he suggest that the CEF was in talks with Sasol regarding its fuel retail business.