SOLB01-Update on Sasol's Credit Rating
Sasol Financing Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1998/019838/06)
(“Sasol Financing" or “the Issuer”)
(Sasol Limited (“the Guarantor”)
Bond Code: SOLB01 ISIN: ZAG000161308
Update On Sasol’s Credit Rating
Sasol notes that the credit rating agencies, S&P Global Ratings (S&P) and Moody’s have completed
their periodic review of Sasol following the release of the company’s interim financial results for 2020.
S&P has affirmed Sasol’s BBB-/A-3 credit rating whilst Moody’s has downgraded Sasol’s credit rating
to Ba1/NP. The ratings action by Moody’s reflects Sasol’s elevated leverage in the context of volatile
market conditions.
As stated in Sasol’s recent financial results, protecting the balance sheet remains an important priority
during the peak gearing phase. In this regard, several proactive actions have already been taken
which include a measured financial risk management programme to hedge oil and ethane commodity
price and exchange rate exposures, managing costs, increasing working capital efficiency and
agreeing additional flexibility on covenants with the lending group.
These initiatives continue to benefit the balance sheet with further actions underway. These include
re-phasing discretionary capital, ongoing delivery of the value-driven asset disposal programme and
active balance sheet management to maintain a healthy liquidity position and a balanced debt
maturity profile as Sasol works to restore an optimal capital structure. Sasol maintains a long-term
commitment to an investment grade credit rating.
Subject to the macroeconomic environment and the impact of COVID-19 on global product demand,
Sasol continues to expect the cash flow inflection point to be reached in the second half of FY20 and
de-leveraging to start thereafter. The overall Lake Charles Chemicals Project (“LCCP”) cost estimate
is tracking US$12,8 billion, within our previous guidance of US$12,6 - 12,9 billion. LCCP is expected
to be EBITDA positive in the second half of FY20 with a contribution of US$50 – US$100m for FY20.
Fleetwood Grobler commented “We recognise the challenges presented by the current market
environment and acknowledge the outcomes of the rating agency reviews. We remain focused on
managing the factors within our control – delivering safe, strong and stable operational performance
and protecting the balance sheet as we bring the Lake Charles Chemicals Project to completion and
start deleveraging. The revised rating profile is not expected to have a material impact on our existing
funding costs. As ever, we remain committed to our capital allocation framework and priorities.”
In light of the above, Sasol management will be hosting a conference call to discuss our approach to
protecting the balance sheet on Tuesday, 10 March 2020, at 15h00 (SA).
Conference call details:
Tuesday, 10 March 2020 Time Dial-in numbers
South Africa 15:00 +27 11 535 3600
United Kingdom 13:00 +44 (0) 333 300 1418
United States (ET) 08:00 +1 508 924 4326
Other countries +27 11 535 3600
The transcript will be available from March 13, 2020 at 6:00 PM (SA) on Sasol’s investor relations
website.
If you have any questions, please email: investor.relations@sasol.com or contact Feroza Syed at +27
10 344 9280.
Johannesburg
9 March 2020
Debt Sponsor
The Standard Bank of South Africa Limited
Date: 09-03-2020 11:28:00
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