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Sasol to invest R140 million in training artisans
Business Report noted in its 29 September 06 edition that Sasol would invest R140 million in developing artisans. Pat Davies, the group's chief executive, said, "Our objective is to equip unskilled people to ensure that South Africa has a viable skills pool to draw from, whether on permanent or contractual basis"
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Sasol publishes 2006 Analyst book
Sasol has published 2006 Analyst book in respect of reviewed provisional annual financial results for the year ended 30 June 2006 on its website.
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Sasol to increase gas production in Mozambique
Business Day noted that Sasol planned to double gas production to 240 million gigajoules from the current 120 million gigajoules from its fields in Mozambique in the next few years.
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Sasol -- shareholders to vote on share repurchase
A circular will be posted to shareholders on 11 September 2006, including a notice convening a general meeting to be held at 09:00 on Tuesday, 3 October 2006 at the Sasol Ltd Auditorium, 1 Sturdee Avenue, Rosebank, Johannesburg for the purpose of considering, and if deemed fit, passing a special resolution to implement a specific repurchase of shares.
The specific repurchase
Sasol and Sasol Investment Company entered into a share acquisition and disposal agreement on 31 August 2006. In terms of that agreement, Sasol will, subject to the approval of Sasol ordinary shareholders, acquire the treasury shares from Sasol Investment Company. The acquisition will occur on or about 6 October 2006. The shares will be acquired at market value and cancelled upon acquisition. As the specific repurchase is intra-group, it will have no financial effect on Sasol or its shareholders, other than in respect of transaction costs, including uncertificated securities tax, that are normally incurred in transactions of this nature.
Conditions
The repurchase is subject to the passing at the general meeting of a special resolution necessary to implement the repurchase and the subsequent registration thereof by the Registrar of Companies. Shareholders will also be requested to pass a special resolution granting a general authority for Sasol and/or its subsidiaries to purchase its ordinary shares up to a maximum of 10% of the issued share capital of Sasol.
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Sasol -- write-down of O&S business to fair value
On 1 March 2001, Sasol acquired Condea from RWE Dea for a purchase consideration of EUR1 295 million. The business, also including thereafter certain existing Sasol assets in South Africa, was subsequently named Sasol Olefins and Surfactants (O&S). At the time, the long-term view of oil prices held by leading reputable agencies and banks was about USD20.00/b. At this price, the margins of the business were considered to be robust and sustainable going forward. On 1 August 2005, Sasol announced its intention to consider the divestiture of the O&S business subject to fair value being received. Thereafter, substantial work was undertaken to prepare the business for sale and the bidding and divestiture processes are far advanced. When the proposed divestiture process was initiated last year, prevailing international oil prices had risen by 125% to about USD45.00/b. Since then, these have increased further by 55% to about USD70.00/b. In other words, international oil prices are currently 250% higher than when the business was acquired. Long-term oil price forecasts by reputable agencies and leading banks have also increased significantly. These increases represent fundamental changes in energy costs and their related impact on oil-derivative feedstock costs. In turn, these have depressed the operating performance of O&S and, as a result, have reduced the potential value of the business.
The strategic rationale for considering the disposal of the business remains valid and relevant. It is not vertically integrated to Sasol's required standards and is not adequately linked to its proprietary Fischer-Tropsch technology processes. The financial impact of changes in the input costs of the business - together with current market-place dynamics - exceeds the benefits of significant reductions that have successfully been achieved in the fixed costs of the business and various other productivity improvements. After a review of valuations and bids received from interested parties, which confirm Sasol's valuation, it is necessary in accordance with International Financial Reporting Standards 5 ( non - current assets held for sale and discontinued operations ) to write-down the net asset value of the business to its fair value. This results in a reduction of net asset value and a charge to the income statement in the financial statements ended 30 June 2006 of about R2.8 billion, after tax. This write-down results in a reduction in attributable earnings per share which are nevertheless still expected to increase by between 5% and 10% over the comparable result of the previous financial year. Headline earnings per share are expected to increase by between 30% and 35%, which compares with the 25% to 30% range announced in the trading statement issued on 2 June 2006. The cash position of the group is not affected by the write-down and based on current assumptions it is not anticipated, therefore, that there will be any effect on current or future dividends. Negotiations will be entered into with prospective new owners in the coming months and, if a divestiture materializes, our gearing will obviously benefit from the cash proceeds. The cash proceeds will contribute to the funding of the exciting international gas-to-liquid (GTL) and coal-to-liquid (CTL) plans that Sasol is considering in various countries, and which are considered to be core to Sasol's future growth ambitions. Sasol's financial results for the year ended 30 June 2006 will be announced on Tuesday, 12 September 2006.
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