Sasol Surges After Advancing Asset-Sale Plan With Gas-Units Deal

Sasol Ltd.’s shares surged more than 11% after it agreed to sell gas facilities to Air Liquide SA, advancing company plans to cut debt by disposing of assets and reducing emissions.

The 8.5 billion-rand ($515 million) deal is for air-separation units used to supply Sasol’s fuels and chemicals processes at plants in Secunda, east of Johannesburg, that make up the biggest oxygen production site in the world, according to Paris-based Air Liquide. The French company already operates one of the 17 units and has plans for a modernization program associated with the deal.

Sasol plans to raise as much as $5 billion through asset sales to help reduce its debt by more than a half. The South African chemicals and fuels manufacturer is accelerating its asset-disposal program, with sales including a stake in its U.S. chemicals project and interest in a Mozambique pipeline well under way.

Shares rose as much as 11.6% after the announcement on Wednesday, and traded 10.3% higher at 147.81 rand by 1:39 p.m. in Johannesburg. A close at this level would make it the biggest one-day gain since June 8.

Sasol is the nation’s second-biggest emitter of greenhouse gases and the sale of the air-separation units will contribute to its goal of cutting emissions by at least 10% by 2030.

Final agreements on the oxygen units are expected by mid-August, with the transaction to close during the 2021 financial year, according to Sasol. The parties will also enter a long-term agreement for supply of the gases.

©2020 Bloomberg L.P.

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