Sasol plans $2bn rights issue

Sasol, a major energy and chemical company based in South Africa, has recently made headlines with its plans to stabilize its balance sheet through a potential $2 billion rights issue. This move comes in response to the challenging economic environment caused by lower oil prices and the impact of the COVID-19 pandemic. Sasol's share price has plummeted by almost 90% this year, prompting the company to take decisive action in order to restore investor confidence. In an exclusive interview with CNBC Africa, Sasol CEO Fleetwood Grobler discussed the company's strategy to address these financial challenges and steer the company back on track. The key theme of the interview centered around Sasol's announcement of a $2 billion rights issue as part of its efforts to stabilize its balance sheet. The company has been grappling with a sharp decline in its share price amidst the ongoing economic turmoil. Grobler elaborated on the rationale behind the rights issue and how it fits into Sasol's broader financial recovery plan. Three key points emerged from the interview. Firstly, Grobler highlighted the impact of lower oil prices and the COVID-19 pandemic on Sasol's financial performance. He acknowledged the significant challenges facing the company and emphasized the need for proactive measures to address them. Secondly, the CEO outlined Sasol's strategy to strengthen its balance sheet, including cost-saving initiatives and asset divestments. The rights issue is a key component of this strategy and is aimed at shoring up the company's financial position. Lastly, Grobler expressed confidence in Sasol's ability to navigate the current economic environment and emerge stronger from the crisis. He underscored the company's resilience and determination to weather the storm. In a quote from the interview, Grobler stated, 'We are taking decisive action to stabilize our balance sheet and restore investor confidence. The $2 billion rights issue is a crucial step in our financial recovery plan, and we are committed to overcoming the challenges ahead.' This statement encapsulates Sasol's proactive approach to addressing its financial woes and charting a path towards sustainable growth. Overall, Sasol's announcement of a $2 billion rights issue reflects the company's determination to overcome the obstacles posed by the current economic climate. By taking bold steps to strengthen its balance sheet and restore investor faith, Sasol is positioning itself for a brighter future amidst uncertainty and volatility in the energy market.