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Sasol - Sasol Inzalo Public Ltd. (RF) results
Sasol Inzalo Public Ltd. (RF) is the holding company of Sasol Inzalo Public Funding (Pty) Ltd (RF). The condensed consolidated interim financial results comprise the financial results of Sasol Inzalo Public Ltd. (RF) and its subsidiary ("the group").
Significant transactions for the six months ended 31 December 2014
Finance income
A dividend of R15.40 per share was received on the 16 085 199 Sasol preferred ordinary shares amounting to R248 million for the period (R195 million for the period ended 31 December 2013 and R389 million for the year ended 30 June 2014).
Finance costs
Interest payable on the preference shares is accounted for in accordance with the effective interest method and amounted to R295 million for the period (R287 million for the period ended 31 December 2013 and R581 million for the year ended 30 June 2014).
Refinancing of debt
As reported previously in the June 2014 annual financial statements, Sasol Inzalo Public Funding (Pty) Ltd. (RF) initiated a process of negotiating the refinancing of the D preference shares through a subsequent issue of C preference shares. The refinancing transaction was implemented on 17 October 2014, when all conditions stipulated in the refinancing agreements were met. The refinancing transaction resulted in a subscription of additional C preference shares by the existing C preference shareholders (R2 178 million), which was used to repay the outstanding capital and notional interest on the D preference shares on 17 October 2014. The interest rate on the C preference shares also reduced from 80.3% of the prime interest rate to 68% of the prime interest rate, effective 17 October 2014.
Cash flows
The finance income received of R248 million was mainly utilised to pay finance costs of R116 million and capital repayments of R48 million. The remainder of the finance costs is only payable at the end of the transaction period. The total proceeds of R2 178 million received on the issue of the additional C preference shares to the current holders was used to redeem the D preference shares. The taxation paid of R3 million relates to Security Transfer Tax levied on the redemption of the D preference shares with Sasol Ltd.
Going concern
The group incurred a net loss of R58 million for the period ended 31 December 2014 and, as of that date, the group's total liabilities exceeded its total assets by R372 million. The group is structured to receive fixed dividends from its investment in Sasol Limited over the life of the transaction and will therefore have sufficient cash to meet its preference share obligations in the short-term. The directors have made an assessment of the group's ability to continue as a going concern and there is no reason to believe the business will not be a going concern in the year ahead.
Investment in security
The investment in Sasol Ltd. was revalued at 31 December 2014 at a closing market price of R431.01 per share to an amount of R6 933 million (R8 276 million at 31 December 2013 at a closing market price of R514.50 per share and R10 172 million at 30 June 2014 at a closing market price of R632.36 per share).
Investment fair value reserve
As a result of the revaluation of the investment in Sasol Ltd. to a higher value than the original cost price, a positive investment fair value reserve of R851 million is recognised (R1 944 million at 31 December 2013 and a R3 486 million at 30 June 2014).
Declaration of ordinary dividend
Taking into account the recent decline in the value of the underlying investment (Sasol Ltd.) due to the lower oil price and difficult macro-economic environment, the board of directors have seen it prudent to conserve cash and have concluded that no ordinary dividend will be declared for the six months ended 31 December 2014.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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