Company news in brief
Sasol considers rights issue, asset disposals
South African petrochemicals group Sasol said it would consider raising funds by selling additional shares and disposing of more assets amid growing investor concerns about its debt levels after a crash in the price of oil.
Around R76.5 billion has been wiped off the company's market value last week, with Sasol's shares hitting a 21-year low on Thursday, falling as much as 42% as oil prices plunged.
Reacting to the frantic selling, Sasol said it would consider a potential equity issue, reduce costs, reschedule some capital expenditure, expand asset disposals in excess of the current US$2 billion target and engage lending groups.
The company said cash and available facilities stood at around R2.5 billion with no significant debt maturities before May 2021. It has just completed a review of its assets in a bid to reduce debt.
Seeking to assuage investors' fears the company could break its debt covenants, it said that at the current oil price of approximately R580/bbl, it would be within current covenant levels at 30 June 2020. – Nampa/Reuters
Investec abandons unit stake sale
South Africa-based banking group Investec said on Thursday it would not proceed with a 10% stake sale of its asset management business NinetyOne as the coronavirus outbreak in Europe roils stock markets.
The company said it will, however, push ahead with the listing and demerger plans of the asset management business on the London and Johannesburg exchanges on March 16.
Investec will therefore continue to hold a 25% stake, it said in a statement, and will be subject to a 180 day lock-up period.
"Market conditions have proved particularly challenging in the recent two weeks and, while we were encouraged by the strength and quality of investor engagement in relation to the global offer, we have decided to retain our shareholding," the South African lender said in the statement. – Nampa/Reuters
Exxaro looks beyond coal
South African coal company Exxaro Resources said it will seek to extract value from the carbon-intensive fossil fuel while it still can, but for the future is focused on finding opportunities in greener energy.
South Africa - the continent's biggest greenhouse gas emitter - gets the vast majority of its energy from coal-fired power stations run by state-owned power utility Eskom and Exxaro is a supplier to Eskom.
Exxaro reported a 13% rise in annual earnings as gains from its stake in Sishen Iron Ore offset lower earnings from coal.
Coal earnings were hit by factors including lower demand from Eskom in part because of a delayed power plant project, and as the seaborne market was oversupplied.
The miner declared a final dividend of 566 cents per share compared with 555 cents per share a year earlier. – Nampa/Reuters
Fastjet performs below expectations
South African low-cost carrier Fastjet said on Thursday it performed slightly below expectations in January and February due to excess capacity, adding it was ready to further cut schedules due to the coronavirus outbreak.
The company, which has been flagging going concern doubts as it tries to sell its Zimbabwe operations, said it has cash to meet its needs up until the end of June, given its forecast revenue is not impacted by reductions in demand due to the fast spreading virus. – Nampa/R
Tullow Oil worried about asset sales
Tullow Oil said on Thursday the oil price fall may jeopardise a planned US$1 billion in asset sales needed to refill its coffers, raising the risk the group's lenders may become reluctant to approve loans essential to shoring up its future.
The Africa-focused company said it expects its free cash flow to slide to US$50 million-US$75 million this year at an oil price of US$50 a barrel, but hopes to raise cash from the asset sales.
Free cash flow at the group had already fallen last year to US$355 million from US$411 million in 2018. Highly-indebted Tullow expects to break even at prices of US$45 a barrel.
The company said the oil price slide might thwart the asset sales and could in turn have the effect of stopping its lenders from approving semi-annual reserve-based loans or amendments to its debt covenants if required.
"Therefore, we have concluded that there is a material uncertainty that may cast significant doubt that the group will be able to operate as a going concern," it said in a statement. – Nampa/Reuters
South African petrochemicals group Sasol said it would consider raising funds by selling additional shares and disposing of more assets amid growing investor concerns about its debt levels after a crash in the price of oil.
Around R76.5 billion has been wiped off the company's market value last week, with Sasol's shares hitting a 21-year low on Thursday, falling as much as 42% as oil prices plunged.
Reacting to the frantic selling, Sasol said it would consider a potential equity issue, reduce costs, reschedule some capital expenditure, expand asset disposals in excess of the current US$2 billion target and engage lending groups.
The company said cash and available facilities stood at around R2.5 billion with no significant debt maturities before May 2021. It has just completed a review of its assets in a bid to reduce debt.
Seeking to assuage investors' fears the company could break its debt covenants, it said that at the current oil price of approximately R580/bbl, it would be within current covenant levels at 30 June 2020. – Nampa/Reuters
Investec abandons unit stake sale
South Africa-based banking group Investec said on Thursday it would not proceed with a 10% stake sale of its asset management business NinetyOne as the coronavirus outbreak in Europe roils stock markets.
The company said it will, however, push ahead with the listing and demerger plans of the asset management business on the London and Johannesburg exchanges on March 16.
Investec will therefore continue to hold a 25% stake, it said in a statement, and will be subject to a 180 day lock-up period.
"Market conditions have proved particularly challenging in the recent two weeks and, while we were encouraged by the strength and quality of investor engagement in relation to the global offer, we have decided to retain our shareholding," the South African lender said in the statement. – Nampa/Reuters
Exxaro looks beyond coal
South African coal company Exxaro Resources said it will seek to extract value from the carbon-intensive fossil fuel while it still can, but for the future is focused on finding opportunities in greener energy.
South Africa - the continent's biggest greenhouse gas emitter - gets the vast majority of its energy from coal-fired power stations run by state-owned power utility Eskom and Exxaro is a supplier to Eskom.
Exxaro reported a 13% rise in annual earnings as gains from its stake in Sishen Iron Ore offset lower earnings from coal.
Coal earnings were hit by factors including lower demand from Eskom in part because of a delayed power plant project, and as the seaborne market was oversupplied.
The miner declared a final dividend of 566 cents per share compared with 555 cents per share a year earlier. – Nampa/Reuters
Fastjet performs below expectations
South African low-cost carrier Fastjet said on Thursday it performed slightly below expectations in January and February due to excess capacity, adding it was ready to further cut schedules due to the coronavirus outbreak.
The company, which has been flagging going concern doubts as it tries to sell its Zimbabwe operations, said it has cash to meet its needs up until the end of June, given its forecast revenue is not impacted by reductions in demand due to the fast spreading virus. – Nampa/R
Tullow Oil worried about asset sales
Tullow Oil said on Thursday the oil price fall may jeopardise a planned US$1 billion in asset sales needed to refill its coffers, raising the risk the group's lenders may become reluctant to approve loans essential to shoring up its future.
The Africa-focused company said it expects its free cash flow to slide to US$50 million-US$75 million this year at an oil price of US$50 a barrel, but hopes to raise cash from the asset sales.
Free cash flow at the group had already fallen last year to US$355 million from US$411 million in 2018. Highly-indebted Tullow expects to break even at prices of US$45 a barrel.
The company said the oil price slide might thwart the asset sales and could in turn have the effect of stopping its lenders from approving semi-annual reserve-based loans or amendments to its debt covenants if required.
"Therefore, we have concluded that there is a material uncertainty that may cast significant doubt that the group will be able to operate as a going concern," it said in a statement. – Nampa/Reuters
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