First, the proposed transaction will help generate cash and to shore up Sasol’s balance sheet. Second, the selling down forms part of a broader strategy to exit non-core assets through targeted divestments. Most important, is that Sasol will still have access to cheap gas from Mozambique to use at its South Africa operations, in particular at Secunda.
In March 2020, following the onset of the Covid-19 crisis which precipitated a plunge in global oil and chemical prices to record lows, Sasol instituted a range of measures to ease pressure on the company’s highly geared balance sheet. Added to this was the volatile rand-dollar exchange rate.