Sasol sells oxygen site to reduce debt


Sasol sells oxygen site to reduce debt

Published Date: 2020-07-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sasol sells oxygen site to reduce debt

The energy and chemicals group is selling the site to a unit of French multinational Air Liquide as part of its accelerated disposal programme.

Sasol has reached a deal to sell its oxygen production site in Secunda to Air Liquide for about R8.5 billion as it disposes of non-core businesses to reduce debt.

Sasol SA will transfer the business to Air Liquide Large Industries SA, a subsidiary of the French industrial gases company. The 16 air separations units provide oxygen for its fuels and chemical production processes in Secunda as well as producing other gases used at the site. Air Liquide will continue to supply the gases to Sasol's operations under a long-term gas supply agreement. Air Liquide already owns and operates the 17th air separation unit at the Secunda site and taking on the full fleet was expected to result in energy efficiency benefits, it said.

Meanwhile, the group said its accelerated disposal programme, announced in March, was impacting the completion of its year-end process. It expected to release an updated trading statement early next month. The group also renewed its cautionary announcement. Apart from asset disposals, the energy and chemicals group's response strategy to Covid-19 and a weak oil price includes a possible $2 billion rights issue.

Its shares closed 8.7% higher at R145.59 yesterday.

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