Submitted by admin on Fri, 10/02/2020 - 00:00

Divestment of a 50% Interest in Sasol’s LCCP Base Chemicals Business and the Creation of a JV with LyondellBasell

Sasol Limited
(Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Sasol Ordinary Share codes: JSE: SOL NYSE: SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE: SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
(“Sasol” or “Company”)

DIVESTMENT OF A 50% INTEREST IN SASOL’S LAKE CHARLES CHEMICALS PROJECT (LCCP)
BASE CHEMICALS BUSINESS AND THE CREATION OF A JOINT VENTURE WITH
LYONDELLBASELL

1. Introduction and background

The shareholders of Sasol (“Sasol Shareholders”) are referred to the announcement made at our
November 2017 Capital Markets Day relating to our portfolio optimisation programme. Further Stock
Exchange News Service (“SENS”) announcements released by the Company on 17 March and 18
June 2020 confirmed our strategic ambition to focus on our Performance Chemicals business. In the
March 2020 announcement Sasol set out its response plan, which included decisive action to reduce
Sasol’s debt and an intention to reset Sasol’s strategy to improve long-term shareholder returns in a
lower oil price environment. The June 2020 SENS announcement outlined the updated strategy
(“Future Sasol Strategy”), a key part of which is to increase focus on specialty chemicals.

As an integral part of the response plan and consistent with the Future Sasol Strategy, the Company
has been assessing partnering options for its US base chemicals assets, situated at Sasol’s Lake
Charles property in Louisiana. An extensive competitive process was followed to identify an
appropriate partner that will enhance the benefits to be gained from the substantial investment in Lake
Charles. Accordingly, Sasol Chemicals USA LLC (“Sasol Chemicals”), a wholly owned subsidiary of
Sasol, has now entered into a suite of agreements and term sheets (“Transaction Agreements”) with
a subsidiary and an affiliate of LyondellBasell Industries N.V. (“LyondellBasell”) the effect of which is
the disposal of a 50% interest in the LCCP Base Chemicals Business (as defined below) and the
portion of the Lake Charles property from which it operates (“the Sale Land”), for a purchase
consideration of US$2 billion (subject to closing adjustments) and the creation of a 50/50 joint venture
in relation to those assets (together, with the other indivisible elements referred to in the Transaction
Agreements, the “Transaction”).

Further high level details of the Transaction are set out below. The Transaction constitutes a Category
1 transaction in terms of the JSE Listings Requirements and, as such, requires the approval of more
than 50% of the votes of the Sasol Shareholders present and voting at the general meeting. A circular
will therefore be delivered to Sasol Shareholders in due course with full details of the Transaction.

The Transaction will represent a significant step towards achieving Sasol’s strategic and financial
objectives by materially reducing net debt, and catalysing a rapid shift towards the Future Sasol
Strategy. The LCCP assets within Sasol’s US Performance Chemicals Business (as more fully
described below) including the new Ziegler alcohol plant, ethylene oxide and derivatives plants, and
the Guerbet alcohol plant, will be retained by Sasol. Sasol will also continue to have an integrated, low
cost ethylene value chain at Lake Charles which will enable it to protect the profitability of the
performance chemicals business. Following the Transaction, Sasol will continue to realise the core
strategic and financial benefits of its capital investment in the LCCP.

2. The Transaction

Transaction structure

The Transaction will result in the creation of a 50/50 joint venture with LyondellBasell in relation to the
LCCP Base Chemicals Business and the associated land. Sasol will retain ownership and
operatorship of the US Performance Chemicals Business, the other legacy base chemicals assets at
Lake Charles, and the remainder of the Lake Charles property.

This will be delivered pursuant to the Transaction agreements, through which Sasol Chemicals will
dispose of a 50% stake in Louisiana Integrated Polyethylene JV, LLC (“LIP”), a newly incorporated
subsidiary of Sasol Chemicals to LyondellBasell LC Offtake LLC, a subsidiary of LyondellBasell. The
purchase consideration will be US$2 billion, subject to customary and ad hoc transaction-specific
closing adjustments which are not, in aggregate, expected to be material. LIP will hold Sasol’s LCCP
Base Chemicals Business, as well as the Sale Land. Equistar Chemicals LP, an affiliate of
LyondellBasell, will be the operator of the business of LIP.

The Transaction Agreements contain customary representations and warranties from Sasol
Chemicals and LyondellBasell. If the Transaction is terminated due to, inter alia, breach by Sasol
Chemicals, or failure to obtain Sasol Shareholder approval of the Transaction, and at any time during
the six months following the date of such termination, Sasol Chemicals or any of its affiliates enters
into an alternative transaction with a third party, there will be a break fee payable by Sasol Chemicals
of US$40 million.

Transaction scope

Sasol’s LCCP Base Chemicals Business comprises the manufacture of ethylene and polyethylene
products using the following assets at the Lake Charles property, and the marketing and sale of these
products (together the “LCCP Base Chemicals Business”):

- The recently constructed ethane cracker, which produces ethylene from ethane feedstock and has
a capacity of 1540 kilotons per annum (“LCCP Cracker”);
- The low density polyethylene (“LDPE”) plant, which has a production capacity of 420 kilotons per
annum; and
- The linear low density polyethylene (“LLDPE”) plant, which has a capacity of 471 kilotons per
annum).

The LCCP Base Chemicals Business excludes the original ethane cracker, which has a production
capacity of 460 kilotons of ethylene per annum (“Original Cracker”). This will be retained by Sasol
together with the US Performance Chemicals Business, consisting of –

- the ethylene oxide value chain which consists of a new 300 kilotons per annum ethylene oxide
unit and a new 100 kilotons per annum ethoxylation unit;
- the new Ziegler alcohol unit (140 kilotons per annum) which supplements the existing Ziegler unit
(at the Lake Charles property;
- the new alumina unit (32 kilotons per annum) which supplements an existing alumina unit at the
Lake Charles property;
- the new Guerbet alcohols (30 kilotons per annum) unit; and
- other Performance Chemicals units include a tetramerization unit producing 1-hexene and 1-
octene, a linear alkyl benzene unit, paraffin extraction unit, and the hydrogenation unit producing
LPA solvent.

LIP will, pursuant to tolling arrangements set out in term sheets entered into as part of the Transaction
Agreements, convert ethane feedstock into ethylene, and also convert ethylene into LDPE and
LLDPE. Sasol will continue to use its 50% attributable share of ethylene production, together with
ethylene produced by the Original Cracker, as feedstock for its US Performance Chemicals Business
and its Gemini HDPE joint venture. Sasol will thereby preserve the benefit of ethylene producer
economics for its retained business, and the ability to realise any further upside growth opportunities
in future.

Transaction timing

It is expected that the Transaction will be implemented before the end of calendar year 2020
(“Effective Date”), when the conditions precedent are expected to be fulfilled and the adjusted
purchase consideration will be received by Sasol Chemicals in cash.

3. The Partners

The LyondellBasell group is one of the leading global producers of plastics, chemicals and refined
products. The LyondellBasell group operates 22 olefins and polyolefins facilities globally with capacity
to produce approximately 7.6 million tons per annum of ethylene, 5.3 million tons per annum of
polyethylene and 5.5 million tons per annum of polypropylene as of December 2019. The majority of
these production facilities are in North America. As of December 2019, and based on published
capacity data, the LyondellBasell group ranked as the third largest producer of ethylene in North
America, fourth largest producer of polyethylene in North America, and the largest producer of
polyethylene in Europe.

The partnership will provide substantial benefits to Sasol due to the partners’ recognised excellence
in cost-effective operation of these type of facilities, their recognised track record in maximising upside
potential and access to their extensive distribution network and customer base.

4. Rationale

The Transaction was agreed following a competitive process in which Sasol explored a number of
potential constructs in order to determine which would realise the most value whilst protecting Sasol’s
long-term strategic priorities. The intention was to generate significant proceeds to apply towards
outstanding debt, while enhancing the benefits to be gained from the substantial investment in Lake
Charles by partnering with a company with world class capabilities in commodity chemicals in the
industry. Through this process it became clear that the proposal that offered the best combination of
upfront and long-term value was that offered by the LyondellBasell group. Sasol believes that the
Transaction has the following compelling benefits for its shareholders:

- Accelerated delivery on strategic objectives: Sasol will continue to have full ownership and
operatorship of the US Performance Chemicals Business as well as the legacy base chemicals
business, which helps provide an integrated value chain. This is consistent with the Future Sasol
Strategy of increased focus on a global specialty chemicals portfolio. This portfolio has well-
established capabilities and potential for long-term growth in a number of product categories
including Ziegler and Guerbet alcohols, in which Sasol already has a strong market position. Such
specialty chemicals products are expected to have a more resilient long-term demand outlook and
higher return on investment than commodity chemicals;

- Reduced leverage: The Transaction is a critical part of Sasol’s response plan to reduce net debt,
improve debt covenant compliance and enhance liquidity. As a result of this Transaction, net debt
before lease liabilities, is expected to reduce materially from approximately US$10 billion to
approximately US$8 billion, significantly improving Sasol’s financial position. Together with
proceeds from other transactions, net debt will reduce by close to US$3 billion;
- Integrated value chain retained: The US Performance Chemicals Business will benefit from
Sasol’s share of low cost onsite ethylene from the joint venture, and all ethylene from the Original
Cracker. This access to low cost ethylene feedstock, as well as the original market and feedstock
advantages of the investment in the LCCP, will help protect the profitability of the US Performance
Chemicals Business;

- Well defined partnership with a proven operator: Sasol will continue to have substantial
participation in the business as a joint venture partner. Clearly defined governance and onsite
partnership arrangements with a world-class group that has significant global ethylene and
polyethylene production expertise should create a strong platform for a highly productive
relationship;

- Upside participation: The Transaction delivers immediate strategic and financial benefits, and
Sasol will also continue to benefit from the ongoing value creation from the LCCP Base Chemicals
Business, including the upside when the macroeconomic environment improves; and

- Growth optionality: Sasol will retain ownership of the remainder of the Lake Charles property and
will be able to utilise vacant land to develop further facilities on the Lake Charles property. This
provides Sasol with a solid base to grow its US Performance Chemicals Business. Sasol will also
be able to secure further ethylene feedstock from future expansions (debottlenecking) of the LCCP
Cracker to enable future growth of its US Performance Chemicals Business.

5. Conditions precedent to the Transaction

The Transaction is subject to the fulfilment of customary conditions precedent, by no later than 31
March 2021, including:

- Approval by Sasol Shareholders of the ordinary resolutions necessary in order to implement the
Transaction;
- Obtaining competition / anti-trust approvals in various jurisdictions; and
- Obtaining the consents or waivers of any person to enable the Transaction to be implemented, in
particular consents required from key technology licence providers.

6. Use of the Transaction proceeds and balance sheet outlook

As outlined above, implementation of the Transaction will represent a significant step forward in
delivering the Company’s response plan announced on 17 March 2020. Proceeds from this
Transaction, in conjunction with proceeds from previously announced transactions and the progress
in achieving short term cash savings measures, will make a meaningful and positive impact on Sasol’s
financial prospects, principally as a result of the intended use of the Transaction proceeds to reduce
Sasol’s debt. .

Notwithstanding this progress, the Company continues to work towards a rights offer of up to
US$2 billion in the second half of the 2021 financial year as the final step of the response plan. This,
if implemented, would allow Sasol to operate sustainably within its covenant thresholds and so deliver
on the Future Sasol Strategy. The amount to be raised in any rights offer and its timing remain subject
to prevailing operating and market conditions as well as other initiatives, such as further disposals,
that Sasol may implement. Any equity raising will also be aligned with the outlook for the Company
under the Future Sasol Strategy. In light of the extended period before any rights offer takes place,
the Company has terminated the standby underwriting arrangements that were put in place in March
2020.

7. Historical Financial information (unaudited)

The value of the assets (fixed assets and working capital) comprising the LCCP Base Chemicals
Business as at 30 June 2020, being the date of the last published financial information of Sasol, was
R67,6 billion (US$3,9 billion). The loss attributable to the LCCP Base Chemicals Business for the year
ended 30 June 2020 was R36,1 billion (US$2,3 billion).

The historical financial information was prepared in accordance with International Financial Reporting
Standards and Interpretations of those standards, as issued by the International Accounting Standards
Board. The historical financial information and pro forma financial effects of the Disposal will be detailed
in the Circular to Sasol Shareholders.

8. Volume outlook

Following the transaction the ownership and anticipated steady state production volumes of the
LCCP Base Chemicals Business will be as follows:

Production Future ownership Steady state3 volumes

[kilotons per annum]

Gross ethylene production LIP 1,540
- LCCP Cracker 2

Gross ethylene production Sasol 460
– Original Cracker

Polyethylene 1,2 LIP 891

(1) Includes LDPE and LLDPE.
(2) Sasol will have 50% of LIP volumes from the time at which the Disposal has been completed and the joint
venture has been formed.
(3) Steady-state volumes indicated are before any potential capacity upside from debottlenecking opportunities.

As a result of the impact of Hurricane Laura there remains uncertainty about the near term outlook at
LCCP Base Chemicals Business. A further update and additional outlook guidance for
LCCP Base Chemicals Business will be provided upon release of the first quarter financial year 2021
Business Performance Metrics results, scheduled for later in October 2020.

9. Circular to Shareholders

A circular containing full details of the Transaction and the proposed resolutions will be delivered to
Sasol Shareholders with a notice of general meeting scheduled to be held on 20 November 2020.

10. Withdrawal of cautionary announcement

Sasol Shareholders are referred to the Company’s cautionary announcement dated 17 March 2020,
as well as the subsequent cautionary announcements, and are advised that full particulars regarding
the disposals and the timing of the rights issue referred to in those announcements have been
provided, caution is no longer required to be exercised by Sasol Shareholders when dealing in the
Company’s securities.

Investor conference call

Chief Executive Officer, Fleetwood Grobler, and Chief Financial Officer, Paul Victor, will host a
conference call via webcast (<a href="https://www.corpcam.com/Sasol02102020&quot; target="_blank">https://www.corpcam.com/Sasol02102020</a&gt;) at 14:00 (SA time) on 2 October
2020 to discuss the Transaction. The slides that accompany the call will be available
at <a href="https://www.sasol.com/investor-centre/lake-charles-chemicals-project/lc…; target="_blank">https://www.sasol.com/investor-centre/lake-charles-chemicals-project/lc…;

2 October 2020
Johannesburg

Financial Advisor and Sponsor:
Merrill Lynch South Africa Proprietary Limited t/a BofA Securities

Strategic Advisor
Centerview Partners UK LLP

South African Legal Advisor
Edward Nathan Sonnenbergs Inc

US Legal Advisor in relation to the Transaction and Anti-trust
Latham & Watkins LLP

Legal Advisor as to US Environmental and Real Estate law
Keane Miller LLP

BofA Securities, which is regulated by the Johannesburg Stock Exchange, which exchange is regulated
by the Financial Sector Conduct Authority, is acting as financial advisor and sponsor to the Company and,
in each case, for no one else in connection with the Transaction and will not be responsible to anyone
other than the Company for providing the protections afforded to the respective clients of BofA Securities,
nor for providing advice in relation to the Transaction or any other matter or arrangement referred to in
this announcement.

Disclaimer - Forward-looking statements
Sasol may, in this document, make certain statements that are not historical facts and relate to analyses
and other information which are based on forecasts of future results and estimates of amounts not yet
determinable. These statements may also relate to our future prospects, expectations, developments and
business strategies. Examples of such forward-looking statements include, but are not limited to, the
impact of the novel coronavirus (COVID-19) pandemic on Sasol’s business, results of operations,
financial condition and liquidity and statements regarding the effectiveness of any actions taken by Sasol
to address or limit any impact of COVID-19 on its business; statements regarding exchange rate
fluctuations, changing crude oil prices , volume growth, increases in market share, total shareholder
return, executing our growth projects (including LCCP), oil and gas reserves, cost reductions, our climate
change strategy and business performance outlook. Words such as “believe”, “anticipate”, “expect”,
“intend", “seek”, “will”, “plan”, “could”, “may”, “endeavour”, “target”, “forecast” and “project” and similar
expressions are intended to identify such forward-looking statements, but are not the exclusive means of
identifying such statements. By their very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections
and other forward-looking statements will not be achieved. If one or more of these risks materialise, or
should underlying assumptions prove incorrect, our actual results may differ materially from those
anticipated. You should understand that a number of important factors could cause actual results to differ
materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-
looking statements. These factors and others are discussed more fully in our most recent annual report
on Form 20-F filed on 24 August 2020 and in other filings with the United States Securities and Exchange
Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking
statements to make investment decisions, you should carefully consider both these factors and other
uncertainties and events. Forward-looking statements apply only as of the date on which they are made,
and we do not undertake any obligation to update or revise any of them, whether as a result of new
information, future events or otherwise.

Date: 02-10-2020 07:05:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.

Ticker
SOL,SOLBE1
Headline Date
Publish Time
07:05:00
Source
Johannesburg Stock Exchange - SENS NEWS DELAYED
Year
2020

Divestment of a 50% Interest in Sasol’s LCCP Base Chemicals Business and the Creation of a JV with LyondellBasell

Sasol Limited
(Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Sasol Ordinary Share codes: JSE: SOL NYSE: SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE: SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
(“Sasol” or “Company”)

DIVESTMENT OF A 50% INTEREST IN SASOL’S LAKE CHARLES CHEMICALS PROJECT (LCCP)
BASE CHEMICALS BUSINESS AND THE CREATION OF A JOINT VENTURE WITH
LYONDELLBASELL

1. Introduction and background

The shareholders of Sasol (“Sasol Shareholders”) are referred to the announcement made at our
November 2017 Capital Markets Day relating to our portfolio optimisation programme. Further Stock
Exchange News Service (“SENS”) announcements released by the Company on 17 March and 18
June 2020 confirmed our strategic ambition to focus on our Performance Chemicals business. In the
March 2020 announcement Sasol set out its response plan, which included decisive action to reduce
Sasol’s debt and an intention to reset Sasol’s strategy to improve long-term shareholder returns in a
lower oil price environment. The June 2020 SENS announcement outlined the updated strategy
(“Future Sasol Strategy”), a key part of which is to increase focus on specialty chemicals.

As an integral part of the response plan and consistent with the Future Sasol Strategy, the Company
has been assessing partnering options for its US base chemicals assets, situated at Sasol’s Lake
Charles property in Louisiana. An extensive competitive process was followed to identify an
appropriate partner that will enhance the benefits to be gained from the substantial investment in Lake
Charles. Accordingly, Sasol Chemicals USA LLC (“Sasol Chemicals”), a wholly owned subsidiary of
Sasol, has now entered into a suite of agreements and term sheets (“Transaction Agreements”) with
a subsidiary and an affiliate of LyondellBasell Industries N.V. (“LyondellBasell”) the effect of which is
the disposal of a 50% interest in the LCCP Base Chemicals Business (as defined below) and the
portion of the Lake Charles property from which it operates (“the Sale Land”), for a purchase
consideration of US$2 billion (subject to closing adjustments) and the creation of a 50/50 joint venture
in relation to those assets (together, with the other indivisible elements referred to in the Transaction
Agreements, the “Transaction”).

Further high level details of the Transaction are set out below. The Transaction constitutes a Category
1 transaction in terms of the JSE Listings Requirements and, as such, requires the approval of more
than 50% of the votes of the Sasol Shareholders present and voting at the general meeting. A circular
will therefore be delivered to Sasol Shareholders in due course with full details of the Transaction.

The Transaction will represent a significant step towards achieving Sasol’s strategic and financial
objectives by materially reducing net debt, and catalysing a rapid shift towards the Future Sasol
Strategy. The LCCP assets within Sasol’s US Performance Chemicals Business (as more fully
described below) including the new Ziegler alcohol plant, ethylene oxide and derivatives plants, and
the Guerbet alcohol plant, will be retained by Sasol. Sasol will also continue to have an integrated, low
cost ethylene value chain at Lake Charles which will enable it to protect the profitability of the
performance chemicals business. Following the Transaction, Sasol will continue to realise the core
strategic and financial benefits of its capital investment in the LCCP.

2. The Transaction

Transaction structure

The Transaction will result in the creation of a 50/50 joint venture with LyondellBasell in relation to the
LCCP Base Chemicals Business and the associated land. Sasol will retain ownership and
operatorship of the US Performance Chemicals Business, the other legacy base chemicals assets at
Lake Charles, and the remainder of the Lake Charles property.

This will be delivered pursuant to the Transaction agreements, through which Sasol Chemicals will
dispose of a 50% stake in Louisiana Integrated Polyethylene JV, LLC (“LIP”), a newly incorporated
subsidiary of Sasol Chemicals to LyondellBasell LC Offtake LLC, a subsidiary of LyondellBasell. The
purchase consideration will be US$2 billion, subject to customary and ad hoc transaction-specific
closing adjustments which are not, in aggregate, expected to be material. LIP will hold Sasol’s LCCP
Base Chemicals Business, as well as the Sale Land. Equistar Chemicals LP, an affiliate of
LyondellBasell, will be the operator of the business of LIP.

The Transaction Agreements contain customary representations and warranties from Sasol
Chemicals and LyondellBasell. If the Transaction is terminated due to, inter alia, breach by Sasol
Chemicals, or failure to obtain Sasol Shareholder approval of the Transaction, and at any time during
the six months following the date of such termination, Sasol Chemicals or any of its affiliates enters
into an alternative transaction with a third party, there will be a break fee payable by Sasol Chemicals
of US$40 million.

Transaction scope

Sasol’s LCCP Base Chemicals Business comprises the manufacture of ethylene and polyethylene
products using the following assets at the Lake Charles property, and the marketing and sale of these
products (together the “LCCP Base Chemicals Business”):

- The recently constructed ethane cracker, which produces ethylene from ethane feedstock and has
a capacity of 1540 kilotons per annum (“LCCP Cracker”);
- The low density polyethylene (“LDPE”) plant, which has a production capacity of 420 kilotons per
annum; and
- The linear low density polyethylene (“LLDPE”) plant, which has a capacity of 471 kilotons per
annum).

The LCCP Base Chemicals Business excludes the original ethane cracker, which has a production
capacity of 460 kilotons of ethylene per annum (“Original Cracker”). This will be retained by Sasol
together with the US Performance Chemicals Business, consisting of –

- the ethylene oxide value chain which consists of a new 300 kilotons per annum ethylene oxide
unit and a new 100 kilotons per annum ethoxylation unit;
- the new Ziegler alcohol unit (140 kilotons per annum) which supplements the existing Ziegler unit
(at the Lake Charles property;
- the new alumina unit (32 kilotons per annum) which supplements an existing alumina unit at the
Lake Charles property;
- the new Guerbet alcohols (30 kilotons per annum) unit; and
- other Performance Chemicals units include a tetramerization unit producing 1-hexene and 1-
octene, a linear alkyl benzene unit, paraffin extraction unit, and the hydrogenation unit producing
LPA solvent.

LIP will, pursuant to tolling arrangements set out in term sheets entered into as part of the Transaction
Agreements, convert ethane feedstock into ethylene, and also convert ethylene into LDPE and
LLDPE. Sasol will continue to use its 50% attributable share of ethylene production, together with
ethylene produced by the Original Cracker, as feedstock for its US Performance Chemicals Business
and its Gemini HDPE joint venture. Sasol will thereby preserve the benefit of ethylene producer
economics for its retained business, and the ability to realise any further upside growth opportunities
in future.

Transaction timing

It is expected that the Transaction will be implemented before the end of calendar year 2020
(“Effective Date”), when the conditions precedent are expected to be fulfilled and the adjusted
purchase consideration will be received by Sasol Chemicals in cash.

3. The Partners

The LyondellBasell group is one of the leading global producers of plastics, chemicals and refined
products. The LyondellBasell group operates 22 olefins and polyolefins facilities globally with capacity
to produce approximately 7.6 million tons per annum of ethylene, 5.3 million tons per annum of
polyethylene and 5.5 million tons per annum of polypropylene as of December 2019. The majority of
these production facilities are in North America. As of December 2019, and based on published
capacity data, the LyondellBasell group ranked as the third largest producer of ethylene in North
America, fourth largest producer of polyethylene in North America, and the largest producer of
polyethylene in Europe.

The partnership will provide substantial benefits to Sasol due to the partners’ recognised excellence
in cost-effective operation of these type of facilities, their recognised track record in maximising upside
potential and access to their extensive distribution network and customer base.

4. Rationale

The Transaction was agreed following a competitive process in which Sasol explored a number of
potential constructs in order to determine which would realise the most value whilst protecting Sasol’s
long-term strategic priorities. The intention was to generate significant proceeds to apply towards
outstanding debt, while enhancing the benefits to be gained from the substantial investment in Lake
Charles by partnering with a company with world class capabilities in commodity chemicals in the
industry. Through this process it became clear that the proposal that offered the best combination of
upfront and long-term value was that offered by the LyondellBasell group. Sasol believes that the
Transaction has the following compelling benefits for its shareholders:

- Accelerated delivery on strategic objectives: Sasol will continue to have full ownership and
operatorship of the US Performance Chemicals Business as well as the legacy base chemicals
business, which helps provide an integrated value chain. This is consistent with the Future Sasol
Strategy of increased focus on a global specialty chemicals portfolio. This portfolio has well-
established capabilities and potential for long-term growth in a number of product categories
including Ziegler and Guerbet alcohols, in which Sasol already has a strong market position. Such
specialty chemicals products are expected to have a more resilient long-term demand outlook and
higher return on investment than commodity chemicals;

- Reduced leverage: The Transaction is a critical part of Sasol’s response plan to reduce net debt,
improve debt covenant compliance and enhance liquidity. As a result of this Transaction, net debt
before lease liabilities, is expected to reduce materially from approximately US$10 billion to
approximately US$8 billion, significantly improving Sasol’s financial position. Together with
proceeds from other transactions, net debt will reduce by close to US$3 billion;
- Integrated value chain retained: The US Performance Chemicals Business will benefit from
Sasol’s share of low cost onsite ethylene from the joint venture, and all ethylene from the Original
Cracker. This access to low cost ethylene feedstock, as well as the original market and feedstock
advantages of the investment in the LCCP, will help protect the profitability of the US Performance
Chemicals Business;

- Well defined partnership with a proven operator: Sasol will continue to have substantial
participation in the business as a joint venture partner. Clearly defined governance and onsite
partnership arrangements with a world-class group that has significant global ethylene and
polyethylene production expertise should create a strong platform for a highly productive
relationship;

- Upside participation: The Transaction delivers immediate strategic and financial benefits, and
Sasol will also continue to benefit from the ongoing value creation from the LCCP Base Chemicals
Business, including the upside when the macroeconomic environment improves; and

- Growth optionality: Sasol will retain ownership of the remainder of the Lake Charles property and
will be able to utilise vacant land to develop further facilities on the Lake Charles property. This
provides Sasol with a solid base to grow its US Performance Chemicals Business. Sasol will also
be able to secure further ethylene feedstock from future expansions (debottlenecking) of the LCCP
Cracker to enable future growth of its US Performance Chemicals Business.

5. Conditions precedent to the Transaction

The Transaction is subject to the fulfilment of customary conditions precedent, by no later than 31
March 2021, including:

- Approval by Sasol Shareholders of the ordinary resolutions necessary in order to implement the
Transaction;
- Obtaining competition / anti-trust approvals in various jurisdictions; and
- Obtaining the consents or waivers of any person to enable the Transaction to be implemented, in
particular consents required from key technology licence providers.

6. Use of the Transaction proceeds and balance sheet outlook

As outlined above, implementation of the Transaction will represent a significant step forward in
delivering the Company’s response plan announced on 17 March 2020. Proceeds from this
Transaction, in conjunction with proceeds from previously announced transactions and the progress
in achieving short term cash savings measures, will make a meaningful and positive impact on Sasol’s
financial prospects, principally as a result of the intended use of the Transaction proceeds to reduce
Sasol’s debt. .

Notwithstanding this progress, the Company continues to work towards a rights offer of up to
US$2 billion in the second half of the 2021 financial year as the final step of the response plan. This,
if implemented, would allow Sasol to operate sustainably within its covenant thresholds and so deliver
on the Future Sasol Strategy. The amount to be raised in any rights offer and its timing remain subject
to prevailing operating and market conditions as well as other initiatives, such as further disposals,
that Sasol may implement. Any equity raising will also be aligned with the outlook for the Company
under the Future Sasol Strategy. In light of the extended period before any rights offer takes place,
the Company has terminated the standby underwriting arrangements that were put in place in March
2020.

7. Historical Financial information (unaudited)

The value of the assets (fixed assets and working capital) comprising the LCCP Base Chemicals
Business as at 30 June 2020, being the date of the last published financial information of Sasol, was
R67,6 billion (US$3,9 billion). The loss attributable to the LCCP Base Chemicals Business for the year
ended 30 June 2020 was R36,1 billion (US$2,3 billion).

The historical financial information was prepared in accordance with International Financial Reporting
Standards and Interpretations of those standards, as issued by the International Accounting Standards
Board. The historical financial information and pro forma financial effects of the Disposal will be detailed
in the Circular to Sasol Shareholders.

8. Volume outlook

Following the transaction the ownership and anticipated steady state production volumes of the
LCCP Base Chemicals Business will be as follows:

Production Future ownership Steady state3 volumes

[kilotons per annum]

Gross ethylene production LIP 1,540
- LCCP Cracker 2

Gross ethylene production Sasol 460
– Original Cracker

Polyethylene 1,2 LIP 891

(1) Includes LDPE and LLDPE.
(2) Sasol will have 50% of LIP volumes from the time at which the Disposal has been completed and the joint
venture has been formed.
(3) Steady-state volumes indicated are before any potential capacity upside from debottlenecking opportunities.

As a result of the impact of Hurricane Laura there remains uncertainty about the near term outlook at
LCCP Base Chemicals Business. A further update and additional outlook guidance for
LCCP Base Chemicals Business will be provided upon release of the first quarter financial year 2021
Business Performance Metrics results, scheduled for later in October 2020.

9. Circular to Shareholders

A circular containing full details of the Transaction and the proposed resolutions will be delivered to
Sasol Shareholders with a notice of general meeting scheduled to be held on 20 November 2020.

10. Withdrawal of cautionary announcement

Sasol Shareholders are referred to the Company’s cautionary announcement dated 17 March 2020,
as well as the subsequent cautionary announcements, and are advised that full particulars regarding
the disposals and the timing of the rights issue referred to in those announcements have been
provided, caution is no longer required to be exercised by Sasol Shareholders when dealing in the
Company’s securities.

Investor conference call

Chief Executive Officer, Fleetwood Grobler, and Chief Financial Officer, Paul Victor, will host a
conference call via webcast (<a href="https://www.corpcam.com/Sasol02102020&quot; target="_blank">https://www.corpcam.com/Sasol02102020</a&gt;) at 14:00 (SA time) on 2 October
2020 to discuss the Transaction. The slides that accompany the call will be available
at <a href="https://www.sasol.com/investor-centre/lake-charles-chemicals-project/lc…; target="_blank">https://www.sasol.com/investor-centre/lake-charles-chemicals-project/lc…;

2 October 2020
Johannesburg

Financial Advisor and Sponsor:
Merrill Lynch South Africa Proprietary Limited t/a BofA Securities

Strategic Advisor
Centerview Partners UK LLP

South African Legal Advisor
Edward Nathan Sonnenbergs Inc

US Legal Advisor in relation to the Transaction and Anti-trust
Latham & Watkins LLP

Legal Advisor as to US Environmental and Real Estate law
Keane Miller LLP

BofA Securities, which is regulated by the Johannesburg Stock Exchange, which exchange is regulated
by the Financial Sector Conduct Authority, is acting as financial advisor and sponsor to the Company and,
in each case, for no one else in connection with the Transaction and will not be responsible to anyone
other than the Company for providing the protections afforded to the respective clients of BofA Securities,
nor for providing advice in relation to the Transaction or any other matter or arrangement referred to in
this announcement.

Disclaimer - Forward-looking statements
Sasol may, in this document, make certain statements that are not historical facts and relate to analyses
and other information which are based on forecasts of future results and estimates of amounts not yet
determinable. These statements may also relate to our future prospects, expectations, developments and
business strategies. Examples of such forward-looking statements include, but are not limited to, the
impact of the novel coronavirus (COVID-19) pandemic on Sasol’s business, results of operations,
financial condition and liquidity and statements regarding the effectiveness of any actions taken by Sasol
to address or limit any impact of COVID-19 on its business; statements regarding exchange rate
fluctuations, changing crude oil prices , volume growth, increases in market share, total shareholder
return, executing our growth projects (including LCCP), oil and gas reserves, cost reductions, our climate
change strategy and business performance outlook. Words such as “believe”, “anticipate”, “expect”,
“intend", “seek”, “will”, “plan”, “could”, “may”, “endeavour”, “target”, “forecast” and “project” and similar
expressions are intended to identify such forward-looking statements, but are not the exclusive means of
identifying such statements. By their very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections
and other forward-looking statements will not be achieved. If one or more of these risks materialise, or
should underlying assumptions prove incorrect, our actual results may differ materially from those
anticipated. You should understand that a number of important factors could cause actual results to differ
materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-
looking statements. These factors and others are discussed more fully in our most recent annual report
on Form 20-F filed on 24 August 2020 and in other filings with the United States Securities and Exchange
Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking
statements to make investment decisions, you should carefully consider both these factors and other
uncertainties and events. Forward-looking statements apply only as of the date on which they are made,
and we do not undertake any obligation to update or revise any of them, whether as a result of new
information, future events or otherwise.

Date: 02-10-2020 07:05:00
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