SALE OF AIR SEPARATION UNITS BY SASOL SOUTH AFRICA LIMITED.
Sasol is pleased to announce that Sasol South Africa Limited (“SSA”), a Major Subsidiary of Sasol, has signed an exclusive negotiation agreement with Air Liquide for the sale of its sixteen air separation units located in Secunda to Air Liquide Large Industries South Africa Proprietary Limited (“Air Liquide”). The proceeds will total approximately R8,5 billion.
The air separation units, which have a capacity of up to 42 000 tons per day, provide oxygen for Sasol’s fuels and chemical production processes in Secunda as well as producing various other gases utilised at the site. Air Liquide will supply the gases to SSA’s operations under a long-term gas supply agreement. It is anticipated that Air Liquide’s expertise would allow, in coordination with Sasol, a targeted reduction in greenhouse gas emissions (GHG) associated with the oxygen production over the coming years, which will contribute towards the GHG reduction for the overall Secunda site.
Air Liquide has been present on the Secunda site since 1979, and already owns and operates the seventeenth air separation unit, which was commissioned in January 2018. Air Liquide owning and operating the full air separation fleet is expected to provide optimisation of management of the assets and energy efficiency benefits.
The transaction remains subject to further due diligence, finalisation of relevant definitive agreements and associated internal and external approvals, including the Competition Commission and the South African Reserve Bank. The parties aim to negotiate final agreements by mid-August, and a further announcement will be made at that time. The transaction is currently expected to close within financial year 2021.
This transaction forms part of Sasol’s accelerated divestment programme as part of Sasol’s comprehensive response plan announced on 17 March 2020.
RELEASE OF TRADING STATEMENT UPDATE
Our accelerated asset disposal programme is impacting the completion of our year-end processes. We anticipate the release of a trading statement update early in August 2020.
FURTHER CAUTIONARY ANNOUNCEMENT
Sasol refers to the SENS announcements released on the Stock Exchange News Service (“SENS”) on 17 March 2020, outlining a comprehensive response strategy designed to mitigate the impact of a lower oil price and COVID-19. The strategy includes a cash conservation programme, an accelerated and expanded asset disposal programme, as well as a potential rights issue of up to US$2 billion which remains subject to the progress of other initiatives. A further SENS announcement was released on 1 July 2020, updating investors on the progress regarding the asset disposal programme.
Sasol shareholders are advised that implementation of the response strategy is underway, the outcome of which may have a material effect on the price of the Company’s securities. Accordingly, shareholders are advised to continue exercising caution when dealing in the Company’s securities until full announcements on the disposal of the air separation units, the asset disposal programme and the potential rights issue are made.
For further information, please contact:
Sasol Investor Relations,
Feroza Syed, Chief Investor Relations Officer
Direct telephone: +27-(0)-82-557-7740