EDITORIAL: Relieved Sasol shareholders give sale thumbs up

Last week’s announcement by Sasol that it had struck a deal with French company Air Liquide was a rare piece of good news for shareholders in recent months.

Sasol’s net debt has peaked at R121bn, which was dangerously high as a proportion of its earnings before interest, taxes, depreciation and amortisation , or core earnings, but manageable until oil cartel members Saudi Arabia and Russia started a price war earlier in 2020 and the Covid-19 pandemic brought whole industries to a grinding halt.

With the ball in Grobler’s court after the deal with creditors, he needed to show that his coherently laid out plan to sharpen the company’s focus on its mainstay energy and chemical business and break it free from the shackles of debt is accompanied by swift execution.If the share price is anything to go by, investors welcomed the Air Liquide deal, perhaps not for its commercial merits, but as a sign that they would not be called upon to inject cash through the issue of new shares.

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