Avior Capital Markets - Sasol Limited (103M) Sasol | Lots of uncertainty but certainly no rights issue

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Avior Capital Markets

Wade Napier

Sasol | Lots of uncertainty but certainly no rights issue

The events of 2019 have seen Sasol lose credibility with shareholders. The USD1.9bn increase in Lake Charles Chemicals Project capex and the USD800m downgrade to FY '20 LCCP EBITDA has led to investors questioning whether SOL requires a rights issue. Whilst the targets SOL set itself at its Nov '17 capital markets day seem a distant memory, we still consider Sasol to be highly cash generative. Under the following circumstances, we do not believe Sasol would require a capital injection;

02/10/2019 9 EN

Underlying

Sasol Limited

Sasol is engaged in manufacturing and marketing of liquid fuels, gas and chemicals. Co. adds value to coal, oil and gas reserves, using these feedstocks to produce liquid fuels, fuel components and chemicals. Co. mines coal and refines imported crude oil and retails liquid fuel products in South Africa, and produces gas and condensate in Mozambique and oil in Gabon. Co. also supplies fuels to oil companies in South Africa and others in South Africa and sub-Saharan Africa. Co. maintains its chemical manufacturing and marketing operations worldwide. Co. divides its operations into three focused business clusters: South African Energy Cluster, International Energy Cluster and Chemical Cluster.

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ZAE000006896 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Wade Napier

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